India must avoid growing into a dystopia

February 11, 2023

General Studies Paper 3

Context:

The Budget 2023-24,has received almost universal praise in the English language media. The Budget is pro-growth, and their prognosis is plausible.

The priorities articulated in the vision for Amrit Kaal:

Evidences of growth:

Data shows that private investment plans during the first nine months of this year to be over 50% greater than what they were a year ago.
Government proposed a target of $5 trillion within five years (2024-25) for India’s economy.
India has overtaken the United Kingdom to become the world’s fifth largest economy.
Consultancy Centre for Economics and Business Research (CEBR): By 2035, India’s economy would reach $10 trillion and become the world’s third largest by 2037.

The West’s self-interest in India:

There is an element of awe that a country once a byword for famine has sloughed off the dead weight of colonial exploitation and grown.
India is not only a relatively rare democracy in the east but also the largest one in terms of population.
As all the countries in the West are democracies, western elites see a possible alliance of interests.
India’s growing economic size has made it attractive for investors.
India’s fast growth is an investment opportunity for the surplus savings of the West.
Investing money in India is likely to fetch the highest returns globally.
The continuous support from the West about India’s growth reflects a deep-seated self interest.

Issues of unemployment:

Unemployment was barely mentioned in the Finance Minister’s Budget speech.
Government data show that in mid-2022, unemployment among urban males was much higher than it was a decade ago.
Data from the Centre For Monitoring Indian Economy Pvt. Ltd: It shows that the number of people employed in December 2022 was less than it was in 2016.
The growth of the national economy has not generated an equal growth in employment.
India does not have an employment policy,either at the Centre or in the States.
Welfarism, defined by the free or subsidized distribution of private goods, is no substitute.

How will employment opportunities rise?

Employment opportunities will arise only when there is demand for goods in the production of which they can participate.
Increased demand for goods of mass consumption alone will lead to an expansion in the demand for these workers.
For an expansion of this demand, arresting the price of food would be essential.

Way Forward

India could well grow fast over the next decade-and-a-half without generating sufficient employment for the legion of unemployed youth, especially in rural areas.

- A concerted policy focus can create the conditions for employment generation in India.

Political parties seem to be pursuing growth with a view to enhancing their electoral prospects, without concern for a possible negative fallout.
India needs growth as it has a backlog of poverty. But the growth that one often sees does not do enough for improving the lives of the poorest, such as by generating employment, and is ecologically harmful.