No concrete job plan
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from the proposed budget to revive the labour market and generate employment by a significant margin, Bidisha said.
Besides, despite impressive progress in terms of different socioeconomic indicators, there remain challenges in some areas, including the labour market, she said.
“Therefore, the importance of job creation has not been duly considered in this budget,” said Bidisha, also the research director of think tank South Asian Network on Economic Modeling.
Among the previous initiatives, the proposed budget laid emphasis on a few in particular, she said.
This includes the establishment of Bangabandhu Sheikh Mujib Industrial City in Chattogram targeting to generate 5 lakh jobs, expansion of an initiative to generate 30 lakh jobs in information technology alongside related services by 2025 and employment generation for 2 lakh youth by 2030 through high-tech parks, she said.
In case of skills training programmes, the proposed budget again put emphasis on a Skills for Employment Investment Program, said Bidisha.
Through this the government has implemented a number of initiatives for skills training and stressed on the creation of a central database to link the demand and supply side of the labour market, she said.
In addition, the proposed budget laid emphasis on initiatives taken for the protection of workers’ rights and promoting women and children-friendly workplaces, she said.
For migrant workers, it mostly re-emphasised the previous initiatives of skill and language training and the continued effort of finding new destinations, said Bidisha.
She thinks tax rebates or continuation of previous rebates on VAT and the import of raw materials for the expansion of domestic industries focusing electrical and electronic devices and household appliances could have a positive impact on industrialisation and local employment generation.
However, given the time lag associated with any industrialisation process, the expected positive impact on job creation will take some time and therefore might have a positive impact only in the medium or long term, she said.
As for boosting private sector investment, which is crucial for generating employment, a continuation of the current fiscal’s budgetary initiatives is not sufficient, said Bidisha.
The budget has targeted a 27.43 per cent private sector investment-gross domestic product ratio, which is 5.6 percentage points higher than this year’s actual figure, but it is not at all clear how such a massive leap can be made, she said.
“We should also keep in mind that, in election years like this one, it is unlikely that the businessmen or businesswomen will make large scale investments or innovative ventures,” she said.
Besides, rising energy prices in recent months have also constrained the operation of industries by a significant margin, said Bidisha.
“Therefore, under this business-as-usual scenario of the economy, without large-scale targeted measures, we cannot expect any significant shift in employment generation,” she said.
On the other hand, the new budget targets to borrow a large sum from the banking sector, she said.
From a theoretical point of view, this is likely to shrink the sources of available funds for the private sector for expanding businesses and thereby to generate employment, said Bidisha.
Thus, from a macroeconomic point of view, the prospect for employment generation in the short to medium term is not that bright, she said.
As for the SMEs, a number of challenges including those in availing trade licences, limited availability of credit, heightened energy prices and complexities in getting energy connections have slowed down the pandemic-related recovery process, she said.
“This budget has not offered any new direction for the expansion of SMEs (small and medium enterprises) which is another crucial source of employment generation,” said Bidisha.
“The expectations from the proposed budget surrounding the labour market have not been fulfilled,” she said.
“To deal with the challenges of the labour market, a detailed plan of action with targeted interventions involving both large and small-scale business initiatives is needed,” she said.
In addition, the government should also play the leading role in protecting the rights of the workers and providing skills to potential workers in accordance with the demand side of the labour market, said Bidisha.
It should also encourage more women to enter the formalised labour market and deal with the challenge of a skills mismatch between the supply and demand sides, she said.