India’s government will spend $24 billion on employment and training, it said Tuesday, as Prime Minister Narendra Modi looks to address uneven economic growth and mollify disgruntled voters after a surprising election setback last month.
The funding will be used over five years for a package of five schemes and initiatives to “facilitate employment, skilling and other opportunities” for more than 40 million young people, finance minister Nirmala Sitharaman said in her annual budget speech.
Some will go on “employment-linked incentives” for companies, which the government hopes will create jobs.
“The global economy, while performing better than expected, is still in the grip of policy uncertainties,” Sitharman said.
“In this context, India’s economic growth continues to be the shining exception and will remain so in the years ahead,” she added.
Modi’s Bharatiya Janata Party (BJP) fell short of an outright majority in the recent national elections, forcing it into a coalition with regional partners, after its strident Hindu nationalist campaign stumbled over multiple local issues including a jobs crisis and high food inflation.
Modi has overseen India’s ascent to become the world’s fastest-growing major economy.
But his administration has struggled to create enough well-paying jobs for the world’s most populous country, with the International Labour Organization estimating 29 percent of India’s young university graduates were unemployed in 2022.
Sitharaman’s speech also had specific concessions to the BJP’s regional allies, including highways in the eastern state of Bihar and facilitating “special financial support” for a new state capital in Andhra Pradesh, in the south.
Robust economic growth in India has driven a tax windfall, allowing the government to increase spending while still reducing debt.
Despite new spending plans, Sitharaman said India will lower its fiscal deficit to 4.9 percent of gross domestic product this financial year, lower than the 5.1 percent projected during an interim budget in February.
India’s benchmark Nifty index fell as much as 1.8 percent during the budget speech, but it pared back some of the losses in afternoon trading.
