A Budget sans poetry, but filled with political pragmatism Premium

Finance Minister Nirmala Sitharaman's Budget speech focuses on addressing youth unemployment and pleasing crucial allies with incentives and promises.

In a Budget speech sans poetry but filled with political pragmatism, Finance Minister Nirmala Sitharaman kept her focus on addressing youth unemployment, with an eye to keeping crucial allies — the Telugu Desam Party (TDP) governing Andhra Pradesh, and the Janata Dal (U) in power in Bihar — on her side.

Rising unemployment, the lack of avenues to government jobs, and the leakage of question papers for recruitment exams even when vacancies were announced were all issues that weighed heavily on the BJP in the recent Lok Sabha election. In the Union Budget for this year, therefore, this sector has been addressed via a series of incentive schemes that will, it is hoped, help young, first-time job seekers with finding employment.

An internship scheme to place young people at Fortune 500 companies, with an allowance of ₹5,000 per month to be provided by the government and a one-time assistance of ₹6,000, is expected to help generate employment, as is the payment of a month’s wage to those newly entering the workforce in all formal sectors, which will be provided by the government in three installments. This will be applicable to those getting salaries up to ₹1 lakh per month. This move is expected to benefit 2.1 crore young people.

Incentives, directly paid out to employees and employers in the first four years of employment will be paid out for those entering the manufacturing sector, with those producing additional employment across sectors for jobs within a salary of ₹1 lakh per month to be provided by ₹3000 per month for two years to cover EPFO charges. Skilling of more youth, and education loans of upto ₹10 lakh for higher education in domestic educational institutions, with e-vouchers providing annual 3% interest subvention on these loans, was also announced.

The Opposition was quick to point out that these incentives for internships and first-time employees announced by the Finance Minister were uncannily reminiscent of the Congress party’s Lok Sabha manifesto promise of ‘Pehli Naukri Pakki’, to provide paid internships in top companies.

“A copy paste budget,” remarked Rahul Gandhi, the leader of the Opposition in the Lok Sabha.

Key NDA allies, the TDP and the JD(U), however, had no qualms about wholeheartedly welcoming the allocations to Andhra Pradesh and Bihar, the States they govern, in this Budget. The two parties, with 16 and 12 Lok Sabha MPs respectively, are both crucial to the stability of the BJP-led NDA government. For Andhra Pradesh, the goody bag included a financial assistance package of ₹15,000 crore, more funds to complete the Polavaram project, and special packages for backward area development for Rayalseema, Uttaraandhra and Prakasam districts. The Union government has also promised to enforce the guarantees made in the AP Reorganisation Act, 2014, to provide special assistance to nodes in the Visakhapatnam-Chennai industrial corridor, and to develop the industrial centres of Kopparthi and Orvakallu, with a special project for Andhra Pradesh through the Purvodaya scheme.