Budget 2023: More jobs, but companies may tread cautiously

The budget for fiscal 2024 with emphasis on capital expenditure as well as stoking personal consumption is expected to result in the creation of significant employment opportunities across sectors including infrastructure, manufacturing, tourism, retail, consumer goods, renewable energy, healthcare, new-age technology domains such as artificial intelligence and green jobs.


However, hiring firms and economists told ET that while the proposals outlined will boost positive sentiment in a hiring market that has seen a coming-off of post-Covid highs in recent months amid a slowing global economy, companies will continue to remain cautious and hire on the basis of individual requirements and existing bench size. Significant job creation will happen with a lag, and will be more apparent in the medium to long run.


Ajit Isaac, chairperson of business services provider Quess Corp, said among other areas, the capex outlay of Rs 10 lakh crore may lead to an about 10% increase in the demand for construction workers — currently pegged at 60 million-plus — over the next 18-24 months. Additional spending on urban infrastructure will push up employment in urban centres, while the tourism sector, already a large employment generator, will see significant growth in job creation, along with formalisation becoming a bigger story.

“Sentiment will improve overall. Private sector investment which had been holding back will also start coming back. The system is getting better: tax resolutions, dispute resolutions are happening faster,” added Isaac.

“The budget is very well-balanced with a focus on sustainable long-term economic growth,” said EMA Partners India managing director K Sudarshan.

Focus on tax savings for the middle class and increase in disposable income will spur consumption which will lead to further job creation, especially in sectors like retail and consumer goods and services sectors like travel and hospitality. Apart from these, there are measures like allocation to production-linked incentive schemes in manufacturing and others, leading to an impetus to capex in sectors such as renewable energy which will create long-term employment, added Sudarshan.

While infrastructure investments will prove to be a huge boost to employment, investments in new-age technology domains such as 5G and AI will unleash new potential job opportunities in these areas, said Viswanath PS, managing director at Randstad India.

Several announcements have been made to fuel the growth of MSMEs and startups which were adversely impacted by the pandemic. Announcements such as a Rs 9,000 crore corpus for revamped credit guarantee scheme and setting up an agriculture accelerator fund would help revive these sectors and create new job opportunities, Viswanath added.

Sectors such as cement, steel, machinery and capital goods are expected to benefit from the budget in terms of indirect job creation, mostly in the blue-collar segment.

Bank of Baroda chief economist Madan Sabnavis said as growth takes place in these sectors due to the budget boost, there would be a tendency to create jobs.

“However, higher demand does not necessarily mean immediate hiring acceleration by companies. It will depend on the individual requirement of companies, existing manpower, bench size and capacity to add more people to the payrolls. Companies will continue to be cautious due to the overall global and domestic environment and threats of a recession, which will restrict the number of jobs created,” said Sabnavis.

“Waste management recycling, green energy and tourism are some of the sectors that may witness demand for more manpower,” said Ciel HR Services chief executive Aditya Narayan Mishra. “However, the question remains whether corporates have enough money and appetite to invest on more manpower in the current volatile macroeconomic situation. That will be a major factor to watch out for in the months ahead.”