Considering something on lines of Employment Guarantee Scheme: CEA Subramanian

Not just India, but discretionary spending by consumers is down across the world, Chief Economic Advisor Krishnamurthy Subramanian said in an interview with CNBC-TV18.

He said that consumption pattern has changed and that because of uncertainty over future income, people were saving a lot.

"We have to focus on reducing the impact of uncertainty and the precautionary motive to save and that will come primarily from people having more certainty on their incomes, which basically I am alluding to employment," Subramanian said.

"So that I think is one of the key aspects that we need to be focusing on. I think that employment is important because that provides an assurance of income going forward and thereby provides people the comfort to go and spend. It reduces the impact of the precautionary motive to save amidst the uncertainty. So something along the lines of Employment Guarantee Scheme is being considered."

Nearly six million white-collar workers lost their jobs between May and August amid the COVID-19 pandemic, according to data by the Centre for Monitoring Indian Economy (CMIE). These include engineers, physicians, teachers, accountants, and analysts, among others.

According to the CMIE website, during May-August 2019, white-collar employment peaked at 18.8 million. It remained almost stable at 18.7 million in the September-December 2019 period but later fell to 18.1 million during January-April 2020 which reflected partial effects of the lockdown.

"It is useful to focus on employment and not just employment in the unskilled sector because there has been impact across the board. Therefore in order for a sustained demand push to come, I think it is important that we focus on employment from a broader perspective," Subramanian said.