Unlike in 2014, when the NDA inherited an economic legacy from UPA 2.0, this time, NDA 2.0 has to own up and take responsibility for the good or bad that transpired during the last five years’ governance, and to improve upon its efforts by making best use of the governance framework.
However, solving economic riddles, vaguely reflected by statistical measurements, may go well beyond the initial euphoria of the 100 days’ agenda, including, keeping the economic growth rate above 7 per cent and arresting the rising unemployment. As an indication of the difficult journey ahead, the latest Periodic Labour Force Survey, 2017-18 reveals that growing unemployment is real, with the rate being at its peak level in the last 45 years, and attributes lack of skills as a major cause. The increasing disconnect between growth and jobs adds another dimension to the complexity of this problem.
Renewed focus on skilling
The shift towards jobless growth may be tackled by a renewed focus on training and skill development efforts, thereby reaping the benefits of a demographic dividend and youth power. Another solution may also come from social entrepreneurs. A developing country like India needs to maintain a fine balance between fiscal deficit and welfare initiatives to achieve inclusive growth. It implies the optimum utilisation of resources backed by technology as an enabler.
The achievements of NDA 1.0, for instance, were an increased pace of growth in the infrastructure sector, taming of inflation rate to below 3.5 per cent and the fiscal deficit to below 3.5 per cent of GDP. These need to be maintained for the next five years. The continuance of schemes like Electricity for all , Housing for all , Ayushman Bharat health insurance , Pradhan Mantri Kisan Samman Nidhi , and other similar benefits may act as an effective socio-economic leveller, provided there is adequate coordination among Central and State Governments, in line with the spirit of co-operative federalism.
Farm sector resource allocation
The distressed primary sector, particularly agriculture, needs a careful re-look, as the fall in its contribution to GDP has a direct impact on those who remain dependent on the farm sector for their livelihood. This imbalance between sectoral contributions to GDP and the benefits for those contributing to the sector’s growth demands careful resource planning and reallocation. Nevertheless, the booming service sector has to continue meeting aspirations of urban millennials and rural migrants.
The linkages between foreign investments and authentic GDP figures, well established by economists, justifies further initiatives for ease of doing business to promote foreign investments and domestic manufacturing. Indigenous research and development in emerging economies like India still needs government’s financial and policy support. India has to transform itself from a buyer of products and technologies to a strong indigenous manufacturer and an active partner in the global supply chain. We can no longer afford import-led growth; it has, rather, to be an inclusive, quality and sustainable growth.
(The writer is a research scholar in the Public Policy & Governance Area of the 2018 Batch at MDI Gurgaon.)