Mumbai, India – Prema Salgaonkar wakes up hours before dawn and begins to cook food in her suburban Mumbai home to sell. Her son, Amar returns from work only when the sun is well above and she is done making her nearly 100 vegetable-stuffed parathas.
Salgaonkar lost her job at a nonprofit nearly a year ago and her son Amar, 35, lost his job selling mobile phones and data plans six months ago. With no retailers hiring, he eventually took up temporary work, travelling nights on transport trucks, helping drivers negotiate with police and other officials.
This week as Finance Minister Nirmala Sitharaman presents the budget on March 1, she will have to find a way to spur growth and employment for the millions of people like the Salgaonkars, who are struggling to find steady work, while keeping to fiscal deficit targets.
“We don’t sit at home,” Prema says, about how they ended in these temporary jobs. She quickly lists how prices for vegetables have shot up, leaving her with little money to meet expenses and save up for Amar’s wedding, which now seems like a distant dream given that he doesn’t have a steady job.
India’s gross domestic product (GDP) growth fell to 5.4 percent for the quarter ending September 2024, the latest data available and the slowest in seven quarters. Growth is expected to slow to 6.4 percent for the fiscal year ending March 31, the slowest in four years. However, “there is no room for fiscal leniency,” or increasing government spending to kick-start growth, says Dhiraj Nim, an economist at ANZ Bank.
Increased government spending during the pandemic led to India’s fiscal deficit ballooning to 9.3 percent in the fiscal year ending March 2021. Sitharamanan has said she plans to bring it down to 4.9 percent this year and below 4.5 percent next year.
Economists say weak consumer demand and low capital investment by private companies have been a drag on the economy.
“Some economists, including me, have flagged that post-COVID demand was a problem,” says Sunil Sinha, professor of economics at the Institute for Development and Communications, Chandigarh.
Demand for goods and services recovered to pre-pandemic levels only in certain areas, such as from wealthy Indians, for international tourism, luxury cars and other premium products, Sinha says. But demand for mass-consumption products, such as soaps, shampoos and biscuits had remained low and fell further in the past quarter.
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