The missing ‘worker’ in Budget 2022 and its implications

The missing ‘worker’ in Budget 2022 and its implications

The missing ‘worker’ in Budget 2022 and its implications

Two popular words — ‘worker’ and ‘labourer’ were absent in the finance minister’s speech. This signifies a paternalistic approach to workers where workers are not holders of any legitimate rights over re-distributed wealth.

By J John

Finance minister Nirmala Sitharaman’s speech while presenting Budget 2022 is littered with words, ‘jobs’ and ‘employment’. The words reflect the core ideological position of the budget. What is being conveyed is that large-scale budgetary provisions for capital investments will facilitate higher GDP growth, which in turn will bring jobs and employment, thereby increasing income of the poor.

The political economy of this trickle-down theory was again articulated by the Prime Minister when he explained to his party cadres the intent of the 2022–23 Union Budget, the following day. He said, ‘This budget is full of new possibilities for infrastructure, investment, growth and jobs.’

Both—worker as well as labourer—should have found their place at least as a corollary to two other words which have found such prominence in the budget speech. The word ‘job’ and its synonym ‘employment’ each appear six times in the budget speech. The words ‘job’ and ‘employment’ are not peripheral, but reflect the core ideological position of the budget that large-scale budgetary provisions for capital investments will facilitate higher GDP growth, which in turn will bring jobs and employment, thereby increasing income of the poor. The political economy of this trickle-down theory was best articulated by the prime minister when he explained to his party cadres the intent of the 2022–23 Union Budget, the following day. He said, ‘Along with strengthening the economy, this budget will create many new opportunities for the common man. This budget is full of new possibilities for infrastructure, investment, growth and jobs.’ 

Recurring promises of ‘jobs’/’employment’

In her budget speech, Finance Minister Nirmala Sitharaman explained one by one, how her priorities in budget allocation will generate jobs/employment opportunities. She said, ‘…Productivity Linked Incentive in 14 sectors for achieving the vision of AtmaNirbhar Bharat has …potential to create 60 lakh new jobs’. (p. 2) PMGatiShakti, a National Master Plan for infrastructure development, launched by the Prime Minister on October 13, 2021, has been given tremendous importance in the Budget speech. The finance minister says that the seven engines, namely, Roads, Railways, Airports, Ports, Mass Transport, Waterways and Logistics Infrastructure working in unison will lead to ‘…huge job and entrepreneurial opportunities for all, especially the youth’. (p. 3) 

The finance minister also declared that the Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE) scheme will be revamped with required infusion of funds, which ‘will facilitate additional credit of ₹2 lakh crore for Micro and Small Enterprises and expand employment opportunities’. (p. 7) The government site points out that there are an estimated 26 million micro and small enterprises (MSEs) in the country providing employment to an estimated 60 million persons.

Sitharaman indicates ‘…telecommunication in general, and 5G technology in particular, can enable growth and offer job opportunities.’ Similarly, she emphasizes, ‘Investments in circular economy will …help in productivity enhancement as well as creating large opportunities for new businesses and jobs.’ (p. 14) She justifies that Artificial Intelligence, Geospatial Systems and Drones, Semiconductor and its ecosystem, Space Economy, Genomics and Pharmaceuticals, Green Energy and Clean Mobility systems have immense potential to assist sustainable development at scale and modernize the country and will ‘…provide employment opportunities for youth’. (p. 15)

For the finance minister, ‘capital investment helps in creating employment opportunities, inducing enhanced demand for manufactured inputs from large industries and MSMEs, services from professionals, and help farmers through better agri-infrastructure.’ (p. 17) Same is the case with National Capital Goods Policy, 2016 which ‘would create employment opportunities and result in increased economic activity’. (p. 26)

Income inequality in India

Finance Minister Nirmala Sitharaman is keen to justify each of her major budgetary investment priorities by arguing that those will generate jobs/employment. It will be equally hypothetical to counter argue that the actions will not. A better strategy would be to look at the experiences in the past. It is an established fact that India is among the high-inequality nations. Chancel and Piketty (2017) observe that India comes out as a country with one of the highest increase in top 1 per cent income share concentration over the past thirty years. According to them, growth has been highly unevenly distributed within the top 10 per cent group since the early 1980s, revealing the unequal nature of liberalization and deregulation processes. These findings are also substantiated by the Credit Suisse and Oxfam reports. The Credit Suisse Global Wealth Report 2018 has observed that the richest 10 per cent of Indians own 77.4 per cent of the country’s wealth, while the bottom 60 per cent, the majority of the population, own 4.7 per cent. The richest 1 per cent own 51.5 per cent of the wealth. The Oxfam report ‘Inequality Kills (India Supplement)’ released in January 2022 captures the dynamics of wealth inequality during the pandemic years. As per the report, while 84 per cent of the Indian households saw their income shrinking during the pandemic, the corporate profits have soared wherein the profits of the top 500 companies grew at a record 75 per cent. The report states that the richest 98 Indian billionaires had the same wealth (US$ 657 billion) as the poorest 555 million people in India, who also constitute the poorest 40 per cent of our country. The 2022–23 Budget espouses the trickle-down theory that, in addition to being a misnomer, is impractical.

Importance of ‘worker’ identity

It is not the job creation or employment generation alone, but the quality of employment generated and its income re-distributive capacity that matter more. In this context, the excuse of the absence of the term ‘worker’ or its synonym(s) becomes clearer. The term ‘worker’ has its historic subjective, social and political dimension along with its objective dimension as a part of the production system. The words, ‘job’ or ‘employment’ need not make a distinction between employment in the MSMEs or the organized sector; the question of the nature and quality of jobs is secondary or immaterial. 

Worker identity is collective in nature as opposed to the atomistic inanimate identity of job or employment. The collective identity—working class identity—enables workers to gain a sense of their rights vis-à-vis the entrepreneur to whom they sell their labour power as well as the state that provides and governs policy and institutional framework. Worker identity brings in trade unions, the organizations of and for the workers, as a stakeholder in the economic activity. 

Recognition of those in employment as workers increases the accountability of the state as the custodian of their rights, in particular the realization that economic justice happens only when the state undertakes policy measures that ensure an equitable distribution of the wealth generated in the economy. Annual budgets provide opportunities for the government to set the policy framework to create and redistribute wealth among workers and the people of India, rather than its accumulation in the hands of a few. This is precisely what Sitharaman refused to do. Consider three contexts.

Labour codes not mentioned

First, the Union Government has brought in Labour Codes. Labour codes by their definition are laws that codify the rights of workers. The budget while talking about job creation as an inherent objective of capital investments did not discuss how the Labour Codes will have a place in the interface between the capital and the labour and what the associated cost implications are. It is important to note that jobs and employment as statistical figures, and ease of doing business in itself need not uphold labour rights. The budget merely seems to bring in statistical projections without acknowledging the rights of the worker.

Wages does not find a mention

The second context is the issue of wages. It is the primary channel through which the re-distribution can happen by providing ‘living wages’ (Article 43 of the Indian Constitution) to the workers who contribute to the generation of the wealth. In 2018–19, around 81 per cent of the workforce was employed in enterprises with less than 10 workers, or in the unorganized sector by definition, for whom a regular salary with attendant social security benefits was not available. The principle of payment of Minimum Wages was applicable for them. The Code on Wages, 2020, which subsumed various wage laws (Minimum Wages Act, 1948; Payment of Wages Act, 1936; Payment of Bonus Act, 1965; and Equal Remuneration Act, 1976) proposed a National Floor Level Minimum Wage (NFLMW) below which the wages should not fall. The Expert Committee (2019) constituted by the Government of India recommended a national minimum wage to provide a decent standard of living and meet the basic needs, including education, food and healthcare, proposed ₹ 375 per day (or ₹ 9,750 per month) irrespective of sectors, skills, occupations and rural/urban locations. As per the 2019 Periodic Labour Force Survey (PLFS) data, approximately 58.5 per cent of self-employed workers reported monthly earnings below this threshold. For casual workers, the share at 88.5 per cent was even higher (State of Working India 2021). Moreover, no notification on National Floor Level Minimum Wage has been issued by the Government of India. Behind the hullabaloo about job creation, the 2022–23 Budget shied away from taking even a baby step towards the re-distribution of wealth being generated in India by clarifying its position on wages. 

Social security does not find a mention

The absence of non-discriminatory social security to all workers, another consequence of the structurally debilitating informality of employment in India, is the third context. The latest PLFS data confirms that the basic characteristic of Indian workers have not changed at all. In spite of regime change at the centre, more than 91.3 per cent of India’s over 430 million workers remain unorganized or informal. The definition for the informal workers as evolved by the National Commission for Enterprises in the Unorganized Sector (NCEUS) and now popularized on the e-Shram portal is clear: ‘any worker who is a home based-worker, self-employed worker or a wage worker in the unorganized sector including a worker in the organized sector who is not a member of ESIC or EPFO, or not a Government employee is called an Unorganized Worker’. One’s status as an informal worker is determined by the fact that as a worker whether you received social security benefits from either Employees State Insurance Corporation or from Employees Provident Fund Organization, even if neither of them are substantially funded from the consolidated fund of India. Besides the absence of a living wage, the non-existence of state-funded social security benefits for the workers, is another reason for the existence of the chronic inequality in India. 

The Code on Social Security 2020 which received Presidential assent on September 28, 2020 announced the extension of social security benefits to workers in the unorganized sector, platform workers and gig workers. Although the code on social security talks about the creation of a social security organization and allocation of funds at the central and state levels for the execution of social security schemes, there has not been any notification to those effect. 

Meanwhile, the e-Shram portal, launched by the Ministry of Labour and Employment on August 26, 2021, that intends to create a centralized database of all unorganized workers to be seeded with Aadhaar has been highly pitched. The e-Shram purportedly is for better execution of various social security schemes for the workers in the unorganized sector. To begin with, after registering, the worker will get an accidental insurance cover of ₹2 lacs under the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY). The website of e-Shram says that ‘in future, all the social security benefits of unorganized workers will be delivered through this portal.’ However, there is no clarity about the social security rights available to the workers registered at the portal. 

e-Shram can be seen as the most systematic effort in recent years to institutionalize the duality of Indian labour between the organized and the unorganized that aims to apportion differential rights to the workers. Nevertheless, if the government has to go ahead with the idea of social security for unorganized workers, there should have been a corresponding financial allocation. The e-Shram budgetary allocation is just ₹ 500 crore for FY 2022–23. This again demonstrates the lack of will on the part of the government towards re-distribution of wealth being generated in the country, thereby exacerbating the chronic income inequality. 

Conclusion

The absence of the word ‘worker’ in the finance minister’s budget speech demonstrates a ‘capitalist’ approach, as former Finance Minister P. Chidambram has called it, to wealth creation oriented towards the super-rich. It signifies a paternalistic approach to workers where workers are not holders of any legitimate right over a re-distributed wealth.