The missing ‘worker’ in Budget 2022 and its implications

    Civil societyThe missing ‘worker’ in Budget 2022 and its implications
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    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.’

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    In her budget speech, finance minister said, ‘…productivity linked incentive in 14 sectors for achieving the vision of AtmaNirbhar Bharat has …potential to create 60 lakh new jobs’; PMGatiShakti, will lead to ‘…huge job and entrepreneurial opportunities for all, especially the youth’; the revamped Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE) scheme will ‘facilitate additional credit of ₹2 lakh crore for Micro and Small Enterprises and expand employment opportunities’; ‘…telecommunication in general, and 5G technology in particular, can enable growth and offer job opportunities’; investments in circular economy will ‘…help in productivity enhancement as well as creating large opportunities for new businesses and jobs’; 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’; ‘capital investment helps in creating employment opportunities’; and that the National Capital Goods Policy, 2016 ‘would create employment opportunities and result in increased economic activity’.

    Income redistribution

    Finance minister 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. 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.

    It is not the job or employment generation alone, but the quality of employment generated and its income re-distributive capacity that matters more. It is in this context that we notice the complete absence of two popular words from the Finance Minister’s speech — ‘worker’ or ‘labourer’.

    Economic justice

    Worker identity is collective in nature and 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 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. It brings in 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.

    Living wages for generating wealth

    Consider three contexts. First, the 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. The budget merely seems to bring in statistical projections without acknowledging the rights of the worker.

    The second context, wages, is 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 Code on Wages, 2020, which subsumed various wage laws 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 of ₹ 375 per day (or ₹ 9,750 per month). 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). 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.

    Social security

    The absence of non-discriminatory social security to all workers, is the third context. The latest PLFS data confirms that 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 whether you received social security benefits from either Employees State Insurance Corporation or from Employees Provident Fund Organization. The non-existence of state-funded social security benefits for the workers and the people of India, is another reason for the existence of the chronic inequality in India.

    The Code on Social Security 2020 announced the extension of social security benefits to workers in the unorganized sector, platform workers and gig workers. However, there has not been any notification on the allocation of funds at the central and state levels for the execution of social security schemes.

    The e-Shram portal, launched by the Ministry of Labour and Employment on August 26, 2021, declared that it intends to create a centralized database of all unorganized workers to be seeded with Aadhaar. 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 institutionalizes the duality of Indian labour between the organized and the unorganized that aims to apportion differential rights to workers. 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.

    The absence of the word ‘worker’ in the finance minister’s budget speech signifies a paternalistic approach to workers where workers are not holders of any legitimate rights over re-distributed wealth.


    J John is Editor, Labour File


    Image: Hippopx licensed to use under Creative Commons Zero – CC0

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