Opinion
Job creation, alleviating rural distress likely to top new government's agenda
Summary
- The figure of 8% real GDP growth in FY24 has not really found itself trickling down to a vast majority of masses. Contraction of rural wages (in real terms) depicts the dire state of rural economy
General elections in India have finally concluded after a six-week-long campaign. The results are surprising, as the exit polls had created a euphoria around a resounding victory for the BJP-led alliance. Despite the hype of high economic growth, the voters have expressed their deep concern over the state of economy. More than 90% of about 29.21 crore informal-sector workers registered on the e-Shram portal have a monthly income of ₹10,000 or less. In many poor states, they have spoken about their lived experience, in spite of the official numbers painting a bright picture of the larger economy.
The figure of 8% real GDP growth in FY24 has not really found itself trickling down to a vast majority of masses. Contraction of rural wages (in real terms) depicts the dire state of rural economy. And inequality seems have found an expression in the election results, at least in some states.
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It must be said that elections are too complex to be the outcome of one or a few reasons across the entire country. Many poor states (Bihar and Odisha, for example) have voted for the BJP, so it seems their voters are satisfied with the government and they think that the incumbent government is well equipped to deliver employment and a better future for them.
In any case, the new government, irrespective of its colour, will therefore be bound to take the plight of the masses into consideration.
The top priority for the new government at the Centre would be to formulate and implement a policy regime which would create more employment opportunities. The Union government cannot do it alone, so it will have to work with the states. It means that federal polity, which had witnessed a decline in the last ten years, may regain centre stage again. For a vast and diverse country, it will be a good development.
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According to the Periodic Labour Force Survey (PLFS), about 45.76% of India's workforce was employed in agriculture and allied sectors in 2022-23, but its share in the gross value added (GVA) in the total economy was only 18.3%. And a large number of those employed in agriculture are unpaid family labour. For growth and stability of agriculture and allied sectors, the government has a number of expert committee reports. For any meaningful reforms in the sector, the Union government has to work through the states. It is hoped that government policies will enable growth of the sector, especially animal husbandry, fisheries, poultry etc. For farmers, animal husbandry is an important source of income, and any threat of violence by criminal elements results in stagnation of the same. The new government must come out clearly against it and encourage these allied sectors that have emerged as a major source of farmers' income.
However, it is unlikely that in the short term the productivity of agriculture sector will rise to such a level that these people can earn a decent income. So, the only alternative is to create employment in other sectors where the workforce surplus from agriculture can be deployed. Textiles, leather, construction, food processing are some sectors that can generate employment if right incentives are provided for investment. Investment and job creation in some of these sectors has suffered due to wrong policies, neglect and in some cases actions of violent mobs (tanneries and leather sector, for example).
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Bangladesh in our neighbourhood is an example where the civil society organisations (NGOs) have contributed to social development, especially of women, thus providing skilled woman power to apparel industry. In the last ten years, the NGO sector has attracted enormous scrutiny and high-handedness in India. One hopes that the new government will co-opt the NGOs in developmental programmes and employment-generation activities.
Since the implementation of GST, the micro, small and medium enterprises have suffered loss of business and the corporates have benefitted from the formalization of the economy. They contribute about 30% of the GDP, with a substantial share in exports. They provide employment to millions. While the agriculture sector has gained attention of the government and the media, the handicraft sector has remained neglected. Coupled with tourism and hospitality, it can provide higher income to large numbers living in smaller towns. The infrastructure facilities in these centres need to be upgraded so that their products can get access to markets. ONDC (Open network for Digital Commerce) provides a new area of opportunity to their crafts.
Lastly, the unemployment scene for the educated is worrisome and even explosive. The new government should ensure that vacancies in the government are filled up through a transparent system of competition. Nothing is more demotivating for a young, educated person than to find that the paper of competitive examination in which he appeared has leaked.
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The author is a former Union agriculture secretary.
