DNA Edit: A welcome move

As the 2019 Lok Sabha polls draw closer, the BJP-led NDA government, equally concerned about the state elections slated for this year, has begun working on two key voter-bases.

Apart from the plan to woo the middle class – its key constituency –with tax sops, the BJP is trying to endear itself to the unorganised sector with a social security scheme that offers a plethora of benefits to the most vulnerable section of society.

The central government’s blueprint, prepared by the Ministry of Labour and Employment, aspires to be a cushion for those who are below the subsistence level, and outside the safety net of EPFO and ESIC, insurance against disability and death, and maternity coverage.

The twin structural reforms of demonetization and GST had hit the informal economy the hardest, leading to massive retrenchment and loss of livelihoods. According to ILO India Labour Market Update (2016) and NSSO data (2011-12), more than 90 per cent of the employment in the agricultural sector and close to 70 per cent in the non-agricultural sector falls under the informal category.

By a rough estimate, this sector employs about 40 crore people, who are deprived of social security benefits. To bring this population under the welfare scheme would put a tremendous strain on the national exchequer. But the Centre is willing to stick its neck out, in view of the electoral dividends it can reap.

The erstwhile Congress government’s MGNREGA was instrumental in giving the UPA government a new lease of life. However, all key social security initiatives are as good as their implementation. The current dispensation claims that Aadhaar will be instrumental in preventing leakage of funds and misuse of benefits.

If the loopholes in the delivery system are plugged, the other challenge would be to enlist states as partners who should be willing to contribute their share of the funding. Though individual states have their own schemes to sponsor, and there are several such Central and federal measures currently in circulation, the Centre’s job would be critical in marshalling the existing resources and pitching in generously to make up for the budgetary shortfall.

While Niti Aayog, the government think tank, is planning to reform labour laws, the government also has to contend with rising unemployment in the country.

According to a UN Labour report, 18 million Indians are currently unemployed. The government also has to create the climate and infrastructure through economic, social and labour policy interventions for quality jobs that will attract a burgeoning youth population.

In the current economic scenario, that appears to be a bit of a tall order. 2017 has been particularly disastrous for the Modi government in terms of the economic growth rate, the spill-over effects of which are likely to be felt in 2018.

India’s GDP will grow by 6.5 per cent in the current fiscal due to the GST-induced battering the economy had to suffer. The upcoming Budget will show the roadmap the government intends to follow. It will have a direct bearing on its electoral fortunes.