Budget 2020 - first impressions

I had expressed earlier that the creation of jobs is the biggest challenge India faces today. 

Some factoids 

• World Banks’s South Asia Economic Focus 2018 says that between 2015 and 2025, India's working-age population (those above the age of 15) will expand by 1.3 million per month
• Also as per the report, 50% of them need to be given jobs - Hence 8 Million jobs need to be created per year !

So we have a huge and near-impossible task at hand. Here’s what I heard in the Budget 2020 on this topic. 

First on the capacity side 

1. Spending 99.3K Cr on Education which is up a modest 4.4% is directionally right. Also, allowing Global Education players to come in through partnerships and external borrowings - again just a nudge but in the right direction. 
2. 1 Billion USD spent on Quantum Technologies is a welcome move. India is guilty of not moving fast enough on AI and Industry 4.o and its good to see that we are serious about the Quantum Tech not going to miss the bus. 
3. Skill development by GOI has struggled to take off over the last decade, the fact that the ministry has spent 600 Cr less than last year’s Budget allocation highlights that this space needs a rethink. Spending 3000 Cr on Skilling is a realistic target from an execution standpoint, but spread over such a large population will not be enough. A face-saver could be targeting this 3000 Cr only on a few sectors which are expected to benefit from the planned Infra push will be key, namely Construction, operations, maintenance etc. 
4. Pushing 150 Institutes to offer Apprenticeships and also hiring fresh engineers at Municipal levels might create a better-trained workforce.

On the bigger of the misses - Education should have been opened up for 100% FDI. In 2018, Indian students have already spent 2.8 Billion USD outside India on education !! What will we lose by allowing             World Class Institutions to come to India, other than pushing existing low standard set-ups to up their game and making this spend happen here. 

Bilateral sign-offs with Countries that are desperate for the younger Skill workforce should have found mention, India won’t be able to absorb the entire working population. MEA, MHRD and Skill Development ministry need to address this together. 

On the Job creation side 

1. Setting up a National Recruitment Agency with the ability to conduct computerized tests in every District will be a nudge in the right direction. The government should set a zero unfilled positions report from every Government entity. This could be the lowest hanging fruit. 
2. Huge spending in Infra is likely to spur up the need for a skilled workforce, hence vocational jobs might see a jump. This huge spend will happen only and only if we see disinvestment targets met which are likely to make a noticeable impact only in 2022. 
3. Raising Custom duty on a few items will help Make in India and hence again a step in the right direction. The government needs to get deeper into the malaise that India Inc is facing and provide point relief. Apparel Export is one such high employment industry where India has lost ground to Bangladesh and other countries like Vietnam etc.
4. Massive mobilization of funds from PSU disinvestment, mop up from Telecom (5 GREAT probably) should empower GOI further. Again a great step, GOI should not be in the business of business which is best left to India Inc. 

Overall a mixed bag with huge dependence on execution brilliance of the current government. 

India also needs a sizeable dose of optimism and oneness. Opposition and Government need to meet and work together. We can’t have intelligentsia alienated to a level where they pull the entire’s countries narrative down to a level where they scare away desperately needed investment in the country. 

Needless to say, this is an oversimplification of a very tough topic. 

Disclaimer - Views expressed are mine as an individual and not as a representative of any Company or my role in the same.