The Telegraph
Since 1st March, 1999
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Sops for job creation

New Delhi, Feb. 16: Job creation is likely to be the focal point of this year’s Union budget.

President A.P.J. Abdul Kalam, in his address to Parliament today, hinted at the Centre awarding sops to labour-intensive industries with this in mind.

Kalam said the government would launch a 10-year national manufacturing initiative for businesses that employ a large number of people, such as textiles and garments, leather goods, food, infotech hardware, electronics and auto components.

The Centre would also focus on “software, outsourcing, tourism, healthcare and education” ' booming service sectors that, too, are extremely labour intensive.

North Block officials said they had been asked to provide incentives for investment in these sectors through a budget-related customs and excise duty rejig, which they have been working on for the past few weeks, as well as through direct tax sops.

“Growth sectors like textiles and automobile components as well as service sectors like tourism, healthcare and education, which can create tens of thousands of new jobs, are to be encouraged. That is a clear message,” a top finance ministry official said.

“We also need to incentivise labour-intensive manufacturing to make these sectors strong enough to take on the challenge of cheap imports from Southeast Asia, which are being opened up through free trade pacts.”

The government has already started a scheme to guarantee jobs to poor villagers. The scheme, estimated to cost the government about Rs 23,000 crore, promises jobs for 2.5 crore to 2.8 crore people for 100 days a year.

The official number of jobless in India, though, is as high as 8 crore. Officials say even this is an under-estimation and job avenues in manufacturing and services are the only way to foster growth with employment ' a Congress poll promise.

Kalam, however, obliquely hinted at opening up more sectors to foreign capital while keeping in mind Left sensibilities. The government, he said, “will also create a policy framework that attracts foreign direct investment keeping in view our overall national interest”.

He also said the economy is likely to grow by more than 8 per cent in 2005-06.

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