Much Ado about Nothing

Anindya Bhattacharya

The Budget does not really matter. Like all other times, this time too, the Budget-centric discussion is immaterial and pointless.

Rather, it's much more important to pay attention to the economic survey that was presented at the Parliament on 22nd July, as is done every time right before the Budget. It might seem both imperative as well as commonsensical for this economic survey to carry some relationship with or degree of influence over the Budget, given that it is so closely followed by the latter, but it doesn't; which is why the Budget is ultimately inconsequential. For all functional purposes, the Budget is reduced to the likeness of any random notebook full of household accounting scribbles–just as conjectural, inaccurate, and imbalanced.
However, this year's economic survey brings up a few key points:

Point 1: The massive unemployment rates of the country are currently facing a daunting challenge, which is artificial intelligence. This is the first time it was rather emphatically admitted in the survey that ‘The biggest disruption for the future of work is the accelerated growth in AI, which is poised to revolutionise the global economy, India would not remain immune to this transformation.’ So, as per the survey, it is of paramount importance that the government as well as the corporate sector join hands in withstanding this potential juggernaut.

Point 2: To manage the ever-increasing mass of labourers in the country, it will be necessary to employ 78.5 lakh people on average in the non-agricultural sector every year.

Point 3: Between 2029 and 2039, the number of gig labourers will swell to 2.34 crores, which would make up 4.1% of the entire labour force. This massive increase in the labour force will also entail adequate social security for the same.

Point 4: The majority of the employment is provided by the private and corporate sectors, and the corporate world has now recorded its highest profit numbers in the last fifteen years (in fact, the numbers from 2022-2023 have increased four times since 2019-2020.) So, the responsibility of striking the appropriate balance between labour and capital will continue to fall on these sectors. According to the survey, while it is common knowledge that corporations cherish an overwhelming sense of wonder and reverence for anything AI, they still don’t get to completely circumvent the question of supporting livelihoods and generating employment, because this is directly and intricately related to social stability.

The economic survey brings out a fairly accurate picture of today's ground realities but this year’s Budget, unfortunately, does not reflect any of it. All that the government has been able to do is identify the central issue at best— it isn’t even remotely close to conjuring any magical solutions to it. The responsibility of regulating and running the economy rests on a non-human wielder of power and control, powered exclusively by a world of corporate giants heavily dependent on technology on the one hand, and artificial intelligence on the other. In this context, the government is but obsolete.

So what the government can do is public welfare. It cannot guarantee nation-wide employment, and the few stable or unstable sources of income it can provide won’t really suffice for the proliferating informal labour sector. Naturally, presenting the Budget this year was quite a hassle for Finance Minister Nirmala Sitharaman. She announced three schemes to generate employment and provide livelihoods: Under Scheme A, the government will provide employers with the salaries for newly appointed employees for the first month— not more than INR 15,000— to ensure that they receive a fair wage. Scheme B will provide financial aid to the manufacturing process through EPFO. Scheme C lacks clarity on the details but has been proposed to assist business owners. But these beg several questions because the schemes in question are ridden with confounding contradictions. If the government arranges for the salary of a fresher for their first month at their job, then why will the employer bother to keep them employed post that period unless the employee, who has been at the job for barely a month at this point, proves to be absolutely indispensable to the firm? This is a lot like the Ujala Gas Scheme, where impoverished families would be entitled to their first gas cylinder and gas oven free of cost, but given the consistent nature of these elementary needs, who is to guarantee that they would have the resources to afford them the next time? Also, provisions to produce 1 crore internships in 500 companies have been proposed in the Budget. These internships are meant to be a year long, with a monthly stipend of INR 5000 allocated for the interns. All of this sounds suspiciously similar to the blueprint of the Agniveer scheme!

As the Budget progresses, the Sensex and Nifty indices have plummeted. From the face of it, even the corporate sector does not seem to be making much off of this year’s Budget. Provisions to build new airports have been made in it, so maybe, if these airports turn out to be profitable projects once they become functional post-construction, the corporations (which are so dear to the government) can lap them up. Making such a prediction doesn’t even require any particular awareness and expertise regarding the budget! A lot of financial governmental aid has been allotted to the two pesky states of Andhra Pradesh and Bihar, which is admittedly a politically smart move on the part of the ruling party. Of course, making the public bear the brunt of its political motivations is completely acceptable! Sure, it would be a brilliant step to increase welfare funding given the unstable, dubious financial state people are currently going through as a country. If one spares a glance at the British Budget for 2023-24, one will find that they had kept £341 billion, which is about 29% of the total money allotted to different sectors in the Budget, for welfare. Health and education received £245 billion (20%) and £131 billion (11%) respectively. But of course, none of that would be of any use to the government, because then, they wouldn’t be able to generate profits and hand them over to their poor little corporate dependents! So instead, the government is utilising all of its resources to bloat the profits for the private sector.

The economic survey basically says that the future of employment generation is dark; it is almost with a degree of helplessness and desperation that business owners and industrialists are being asked to reduce their dependence on AI and provide employment to human agents. There is just about no sign of any welfare schemes barring some bizarrely inconclusive— and potentially ineffective— schemes for employment generation. So why is the government clearly shying away from its responsibilities? Well, when their entire game-plan has been divisive politics all along, it is a bit delusional to expect them to deliver any policies that will actually facilitate holistic and non-discriminatory welfare, and unfortunately, welfare policies would have to uniformly uplift all in need of it, irrespective of the government’s concocted polarities. In the economic survey preceding the 2016 Budget, the then Finance Minister Arun Jaitley had proposed the formulation of the ‘Universal Basic Income’, which unfortunately didn’t even make it to the Budget after that. In fact, Mr Jaitley himself never broached the subject again.

So, unless the Budget allots adequate funds for Direct Public Welfare, then it just is a pointless ramble. People don’t really need a Budget to tweak the taxes here and there, which happens all year round anyway. Needless to say, the Budget is just like an overview of minor household accounts at this point; it doesn’t serve much of a purpose anymore.

[Originally published in Ekak Matra, 23 July, 2024. Translation from Bengali by Rohini Jha and edited by Sohini Sengupta]

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Vol 57, No. 7, Aug 11 - 17, 2024