Senior Congress leader and former finance minister P. Chidambaram on Wednesday voiced mixed reactions to the newly proposed Employment-Linked Incentive (ELI) scheme, while taking a swipe at the government for copying his party’s poll manifesto.
“I am particularly happy that she (finance minister Nirmala Sitharaman) had an opportunity to read the Congress manifesto. I would urge friends on treasury benches to read the Congress manifesto so that in your party meetings, you can persuade the prime minister and the finance minister to take some more ideas from our manifesto,” Chidambaram said in the Rajya Sabha. “Copying is not prohibited in this house, in fact, copying is encouraged, rewarded in this house. Please copy a little more,” he added.
Questioning the Government’s Strategy
Chidambaram expressed scepticism about the Production-Linked Incentive (PLI) scheme’s impact on job creation, suggesting the shift to ELI might be an admission of PLI’s shortcomings.
“When you introduced the employment-linked incentive – it must be for some reason. I suspected the PLI scheme didn’t create the kind of jobs you wanted to create,” he said.
The Congress leader called on Sitharaman to disclose the PLI scheme’s outcomes to provide context for evaluating the ELI’s potential.
Chidambaram said his primary concern revolved around the lack of clarity and confidence in the ELI’s execution and its ambitious targets. “Neither I nor any of my learned colleagues are able to get a whole picture of the ELI. It is an interesting idea but it does not inspire confidence that you’ll be able to place 290 lakh people under the ELI,” he warned, urging the government to avoid making the ELI another “election jumla” akin to the unfulfilled promise of 2 crore jobs.
Sitharaman’s Budget Speech
In her budget speech, Sitharaman outlined three key schemes under the ELI, aimed at benefiting 290 lakh individuals. The schemes include direct benefit transfers to new employees, incentives for the manufacturing sector, and reimbursements to employers for additional employment, with a focus on supporting first-time employees and formal sector engagement. The detailed plans involve direct benefit transfers of up to ₹15,000, incentives linked to EPFO contributions, and reimbursements up to ₹3,000 per month to employers for each additional employee.
Criticism of Government’s Approach to Inflation
Chidambaram also took issue with the finance minister’s brief mention of inflation, criticising the government’s seemingly casual approach. “The finance minister dismissed the subject of inflation in 10 words. Is inflation such a trivial subject you can deal with it casually and dismiss it in 10 words? WPI inflation is 3.4%, CPI inflation is 5.1%, food inflation is 9.1%. Go into the hinterlands of India, the inflation is much higher,” he said.
He referenced the Chief Economic Adviser’s (CEA) economic survey, which claimed that “India’s inflation continues to be low, stable and moving towards the 4% target.” Chidambaram questioned this assertion, noting that if inflation was indeed moving towards this target, the Reserve Bank of India (RBI) would have revised the bank rate set in June 2023.
“This is the 13th month of 6.5% bank rate. Bank rate is a good measure of where inflation is moving. If inflation is moving towards the 4% target, why is the RBI keeping the bank rate at 6.5% for the last 13 months?” he asked.
“I think what the CEA said in his economic survey is injury and the finance minister dismissing the subject in 10 words is adding insult to injury,” he added.