How Union Budget 2020-21 Address Inflation and Unemployment Issues?
With all eyes set on Union budget 2020-21, the year 2019 was a momentous year in the annals. The economy of India has witnessed a downfall and with weeks away from the Union budget, the whole country is expecting such a turnaround from the Narendra Modi government and the Union Finance Minister Nirmala Sitharaman to find the way get out of this economic tragedy.
The worrying sights of the GDP growth rate, inflation, unemployment, and more are indeed the areas where the government should bring enough attention into. The nominal GDP growth rate has touched a 42-year low, unemployment also hit a 42-year old low and more. Consumption failed to lift, companies reporting loss and cutback, manufacturing woes and more are some factors which led to an economic slowdown in the country.
Inflation hit the country really hard as the retail price inflation jumped to 7.25 percent in December 2019 and similarly the food inflation was at 14.12 percent, marking a sharp rise of over four percentage points from 10.01 percent for November. The rise in vegetables like onion paved way for the sharp acceleration in the retail industry and among the states of India, Uttar Pradesh was one of the most affected by inflation (8.92 percent) behind only by Odisha (9.41 percent) and Telangana (9.39 percent). Inflation also worries the RBI, as well as the December rate, breached the RBI estimate. If the inflation trend is going up, RBI will be revising key interest rates upward right after the Union Budget 2020-21.
According to the SBI research report, the economic slowdown will force India to generate 16 lakhs fewer jobs than last year. Fewer jobs indicate the lower expected increments in salaries, less consumption and, which automatically makes manufacturers produce less and thus affecting the government. As government jobs, state government jobs and private jobs are being shifted to the National Pension Scheme, the news jobs will be only around 39,000 and if state and central government stay true to the promise.