Content:
- Budgeting for a gender-inclusive ‘Viksit Bharat’
- Averting Engels’ pause
Budgeting for a gender-inclusive ‘Viksit Bharat’
Context:
- The Union Budget 2025-26 underscores inclusive development, prioritizing the poor, youth, farmers, and women.
- The explicit focus on women aligns with the government’s commitment to women-led development.
Relevance : GS 2(Governance)
Practice Question: Gender-responsive budgeting is essential for achieving inclusive economic growth. Discuss the key provisions in the Union Budget 2025-26 aimed at enhancing women’s participation in economic activities. What challenges remain, and how can they be addressed? (250 words)
Gender Budget Allocation – Highest in Two Decades
- Gender budget increased to 8.8% of total Budget (₹4.49 lakh crore), up from 6.8% in the previous year.
- 49 Union Ministries and departments now have gender budget components.
- 12 additional Ministries from non-traditional sectors (e.g., Railways, Ports, Land Resources, Pharmaceuticals) have integrated gender budgeting.
- A whole-of-government approach reflects enhanced gender mainstreaming in policies.
Boosting Female Labour Force Participation Rate (FLFPR)
- FLFPR (usual status) increased to ~42% in 2023-24 (from 33% in 2021-22), nearing the global average of 47%.
- However, a 37-percentage point gap exists compared to men’s FLFPR (79%).
- Achieving the 70% target by 2047 requires:
- Investment in skilling, employment, and entrepreneurship
- Access to productive resources and social security
Key Budget Allocations for Women in Economic Activities:
- Skill India Programme, ESDP, National Skill Training Institutes, DAY-NRLM, MGNREGS, PM Employment Generation Programme, PM Vishwakarma, Krishonnati Yojana
- Combined allocation increased from ₹1.19 lakh crore to ₹1.24 lakh crore, with 52% of funds directed towards women and girls.
- New schemes:
- PM Dhan-Dhaanya Krishi Yojana
- First-time entrepreneurs’ scheme
- Sustainable livelihood for urban workers
- Centres of Excellence for ‘Make in India’
Formalizing Women in the Gig Economy
- 90% of India’s working women are in the informal sector.
- Budget proposes:
- Identity cards for gig workers
- Registration on the e-Shram portal
- Potential benefits:
- Formal identity and recognition
- Access to social security and financial inclusion
- Challenges in the gig economy:
- Low wages, job insecurity, lack of employment rights
- Need for comprehensive social security measures, including maternity benefits
- Labour code enforcement and progressive parental entitlements are crucial for economic security.
AI & Digital Skilling for Women
- Centre of Excellence on Artificial Intelligence (AI) for the education sector introduced.
- ₹600 crore allocated under India AI Mission for gender-focused AI initiatives.
- Importance of AI and digital skilling:
- Bridging the digital divide
- Enhancing women’s employability in high-growth sectors
Strengthening Women’s Financial Inclusion & Entrepreneurship
- Women play key roles in agriculture, entrepreneurship, and employment, requiring better financial support mechanisms.
- Key Budget Provisions:
- Simplifying loan documentation (e.g., delinking Kisan Credit Cards from land ownership).
- Gender-disaggregated tracking of financial access to enhance efficiency.
- Supporting women entrepreneurs via collateral-free loans, alternative credit scoring, and financial literacy programs.
- Potential impact:
- Women-owned MSMEs (20.5% of total MSMEs) employ ~27 million people.
- 30 million additional women-led businesses could generate 150-170 million jobs by 2030.
Gender-Responsive Budgeting – Key to Inclusive Growth
- Budget 2025-26 lays a strong foundation for women’s economic participation.
- Key measures for realizing Viksit Bharat:
- Sustained policy implementation
- Infrastructure development
- Transforming social norms
- Gender-responsive budgeting ensures:
- Strengthened social protection
- An inclusive labour market for both women and men
- Women as key drivers of national growth
Conclusion: Achieving 70% women’s participation in economic activities by 2047 requires sustained investment, social security, and structural reforms. Gender-sensitive policies and financial inclusion will be crucial for women-led economic transformation in India’s journey towards Viksit Bharat.
Averting Engels’ pause
AI Governance and Global Commitments
- Prime Minister Narendra Modi emphasized the need for AI governance, standards, and trust-building at the AI Action Summit in Paris (Feb 11, 2025).
- India, along with over 50 countries, committed to principles of trust, safety, and universal access in AI development.
- The focus on mitigating AI risks while advancing technology aligns with India’s long-term AI strategy.
Relevance : GS 3(Technology), GS 2(Governance)
Practice Question : Discuss the concept of Engels’ Pause in the context of Artificial Intelligence (AI)-driven economic transformations. How can India mitigate the risks associated with job losses and wage stagnation while ensuring sustainable AI adoption? (250 words)
Labour Market Challenges and Engels’ Pause
- Engels’ Pause: A phase where technological advances benefit firms, but real wages stagnate before eventual trickle-down effects.
- Historical perspective: PM Modi highlighted how past technological revolutions created new employment opportunities.
- The Economic Survey acknowledges concerns that AI-driven productivity gains could initially disrupt labour markets.
- India’s IT and services sector contributes significantly to GDP but employs a smaller workforce—AI efficiency gains could reduce job creation and stagnate wages.
- Proactive policy responses are essential to ensure AI adoption does not exacerbate job losses.
Energy Sustainability and AI’s Rising Power Demand
- AI’s energy footprint is increasing due to high computational power required for model training and deployment.
- The U.S. produces over twice India’s electricity with a quarter of its population—data centres are becoming major consumers.
- India must focus on renewable energy-driven AI expansion to ensure sustainability.
India’s AI Strategy and Future Path
- Unlike Western AI firms pursuing a high-investment, low-return model, India must focus on cost-effective AI tailored to national needs.
- The IndiaAI Mission promotes AI research through:
- Subsidised GPU clusters for AI model training.
- Funding for promising AI projects to foster innovation.
- Skilling and education:
- Scaling up AI training programs to ensure a strong domestic talent pool.
- Addressing the brain drain by ensuring India retains top AI expertise.
Way Forward
- AI’s impact on labour markets and wages must be monitored and managed through policy interventions.
- Energy-efficient AI adoption is critical for India’s sustainability goals.
- Developing indigenous AI capabilities will ensure economic competitiveness and reduced dependence on foreign technologies.
- A balanced AI strategy can help India avert Engels’ Pause and harness AI for inclusive economic growth.
