Chidambaram criticizes Budget 2024, flags ‘too little’ response of Modi govt to unemployment crisis

Budget 2024: Former Union Finance Minister and Congress leader P Chidambaram remarked that the Nirmala Sitharaman presented Union Budget 2024-25 was a ‘virtual adoption’ of the Congress Manifesto for the 2024 Lok Sabha Elections.

Chidambaram, at a press conference, said, “She (Nirmala Sitharaman) has virtually adopted the ideas underlying our proposals on Employment-linked Incentive (ELI) scheme, the Apprenticeship Scheme with an allowance to the Apprentice, and on the abolition of the Angel Tax. I wish she had adopted many more ideas from the Congress’ Manifesto.”.

The Union Budget 2024 tabled by Finance Minister Nirmala Sitharaman on Tuesday, 23 July, does ensure a big push for jobs, especially the youth entering the workforce.

Chidambaram chalked out certain aspects of the Union Budget to analyse in his first reaction to Nirmala Sitharaman’s record seventh consecutive budget. In his comment, Chidambaram called the Narendra Modi government ‘blissfully ignorant’.

Unemployment

Congress leader P Chidambaram cited CMIE data to mention that India’s unemployment rate stood at 9.2 percent. Mentioning recent incidences, Chidambaram also flagged ‘for a few dozen vacancies or a few thousand posts, millions of candidates apply and write an examination or appear for an Interview’.

The Congress leader remarked the Modi 3.0 government’s response to the unemployment rate in India was ‘too little’. He also said that the budget allocation would have ‘only little impact’ on the grave’ unemployment situation.

“The claim that the schemes announced by the FM will benefit 290 lakh persons is highly exaggerated”, Chidambaram said.

Nirmala Sitharaman announced that the Centre will give one-month’s salary to those joining their first job. This amount will be provided as a Provident Fund contribution. The move, she said, will benefit 210 lakh youngsters.

Wages

Chidambaram highlighted stagnant wages over the past six years, adjusted for inflation. From 2017-18 to 2022-23, average monthly earnings were ₹12,800 for self-employed individuals, ₹7,400 for casual laborers, and ₹19,750 for regular wage laborers. He emphasized the need to establish a uniform minimum wage of ₹400 per day across all types of employment to address income disparities effectively.

“While some relief has been given to the tax-paying citizen in the 0-20 per cent tax bracket, no relief — I repeat, no relief at all — has been given to the poorer sections of the people, especially those who are non-tax paying wage labourers and casual/daily labourers.” the Congress leader said.

“Workers are not paid a decent minimum wage” Chidambaram mentioned.

Inflation

Chidambaram highlighted India’s current economic challenges, citing WPI inflation at 3.4%, CPI inflation at 5.1%, and food inflation at 9.4%. He criticized the Modi government’s approach towards inflation, calling it ‘casual’ and expressing doubt over its commitment to address the issue.

Chidambaram also questioned the government’s GDP growth projection of 8.2% for 2023-24, citing concerns over the deflator used in calculations, which has been disputed by economists. He emphasized that addressing inflation remains a critical priority despite reported economic growth rates.

Nirmala Sitharaman on Tuesday informed that India’s inflation continues to be low, stable and moving towards the 4 per cent target. “Core inflation (non-food, non-fuel) currently is 3.1 per cent. Steps are being taken to ensure supplies of perishable goods reach market adequately.” Sitharaman said while presenting the Union Budget on Tuesday.

Education

With regards to India’s education system, Chidambaram flagged NEET and the “scandal-ridden National Testing Agency.” He slammed the BJP leader Nirmala Sitharaman for completely obliterating any mention of education in the Budget 2024.

“The government is stubbornly clinging to NEET which, you will recall, is an examination at the end of school education. Interestingly, against BE of ₹1,16,417 crore on Education, the government spent only ₹1,08,878.” Chidambaram rebuked.

Healthcare

Former Finance Minister Chidambaram highlighted critical issues in India’s healthcare sector, stating that out-of-pocket expenditure remains high at 47% of total health spending. He criticized the Union Budget 2024 and Finance Minister Nirmala Sitharaman for neglecting shortages in medical staff, equipment, and the government’s reduced healthcare expenditure—0.28% of GDP and 1.9% of total spending.

Chidambaram also flagged that against a budget estimate of ₹88,956 crore, only ₹79,221 crore was spent, underscoring significant concerns in public healthcare funding.

Agnipath

Chidamabarm also said that Nirmala Sitharaman failed to mention the Agnipath Scheme or heed to the demands of several political parties that the scheme be scrapped.

“The agitation to scrap the Agnipath scheme will continue.” the Congress leader added.

Farmers’ Protest

Farmers are organizing protests with demands including a legal guarantee for Minimum Support Prices (MSP) announced for agricultural produce, a promise previously made by Congress in its manifesto. Chidambaram noted the lack of government response, urging for farmer feedback on the matter.

Education Loan

Chidambaram highlighted the issue of widespread student loan defaults due to high unemployment, stressing a demand for the government to consider a one-time write-off of unpaid educational loan balances.

He expressed disappointment over the government’s focus on new education loans without addressing relief measures for current borrowers facing acute unemployment challenges.

“But what about the huge burden of unpaid education loans?” the Congress leader queried.