Context
- The English-language media has almost universally praised the recently presented budget.
- The data showing a 50% increase in private investment plans in the first nine months of the year support those who believe the budget is pro-growth.
- Although India’s economy is expanding, it is important to consider other aspects of an economy when assessing it as well.
Relevance
GS Paper-3: Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development and Employment
Mains Question
What actions can be taken, especially in light of the country’s persistent poverty, to balance India’s pursuit of economic growth with the need to create employment and address ecological insecurity? (150 Words)
Growth Objectives
- In 2019, India proposed a goal for its economy of $5 trillion in five years (2024–2025). It is obvious that the goal is unlikely to be accomplished as the deadline draws near.
- The London-based consultancy Centre for Economics and Business Research (CEBR) predicted that by 2035, India’s economy would reach $10 trillion and become the third-largest in the world by 2037. India has now surpassed the United Kingdom to become the world’s fifth-largest economy.
India and the self-interest of the West
- Indian democracy is the largest and most populous democracy in the east, making it of particular interest to the West.
- Elites in the West believe that an alliance of interests may exist because all Western nations are democracies.
- India is now more appealing than it was previously due to its expanding economy.
- Although the West’s manufactured goods are no longer attractive to Indians, India’s rapid economic growth presents a lucrative investment opportunity for the West’s surplus savings. Investing in India’s rapidly expanding economy is likely to yield you the highest returns anywhere in the world.
- So, the West’s constant droning about how India is developing is motivated primarily by self-interest.
Security of employment
- According to government data, the unemployment rate for urban males was significantly higher in mid-2022 than it was ten years prior.
- Data from the private sector, specifically the Centre for Monitoring Indian Economy Pvt. Ltd., suggest that the number of employed people was lower in December 2022 than it was in 2016.
- Employment has not increased at a rate that matches the growth of the national economy.
- Employment opportunities will only become available to the majority of the unemployed, who are concentrated in agriculture, when there is a demand for the goods produced in which they can participate.
- Given that this cohort has low levels of education and skills, growth in the IT sector or in export-oriented manufacturers won’t be very helpful in this situation.
- Rising Demand: o The demand for these workers will rise simply as a result of rising prices for goods intended for mass consumption.
- Food prices must be brought under control in order for this demand to increase because only then will low-income households have enough money to purchase more manufactured goods. Instead, there is ongoing inflation that is fueled by food prices.
- The need for an employment policy: Only a concerted policy effort can make India’s labour market more productive.
- Neither at the Center nor in the States do we currently have an employment policy.
- Welfarism, which is characterised by the free or heavily subsidised distribution of private goods, is insufficient.
Infrastructure push and ecological insecurity:
- The persistent unemployment shows that economic growth does not always bring about the outcomes we would hope for.
- However, it is clear that unchecked growth will almost certainly lead to outcomes we would prefer to avoid, like ecological insecurity.
- Cutting a swath through the countryside, hurriedly constructing new elevated national highways often destroys agricultural land and threatens the livelihoods of local residents.
- When it comes to supporting disastrous geo-engineering projects, state governments are not far behind.
- Plans for infrastructure geared towards religious tourism have gained support from a wide range of formations.
- Landslides and flooding have only recently occurred in these States, causing great suffering for the local populace.
- Political parties appear to be pursuing growth throughout India without regard for potential negative consequences in order to improve their electoral prospects.
Conclusion
- In conclusion, India’s emphasis on economic growth should include both raising the size of the economy and the standard of living for its people.
- It is crucial that the growth creates jobs and offers ecological security in order to accomplish this.
- This strategy will not only aid in eradicating poverty but will also advance a just and sustainable society.
- India can ensure a better future for its citizens and future generations by collaborating with the private sector to implement policies and programmes that encourage both economic growth and social and environmental responsibility.
