With India’s GDP growing at a five-year low of 6.8 per cent in 2019 and an ever-increasing younger workforce wanting more and more jobs, the new NDA Government has its task cut out for it. The following should be the key economic priorities of the Indian Government for the next five years.
Priority 1: Jobs for Skill-Based Economy
One of the biggest challenges facing the newly-elected Indian Government is the lack of skills-based jobs. As per the latest data released by the National Sample Survey Office (NSSO) through the Periodic Labour Force Survey (PLFS), India’s unemployment rate was 6.1 per cent in between July 2017 and June 2018 (FY2018), which is a 45-year high. As per the statement released the Ministry of Statistics and Programme Implementation, this data cannot be compared with that of the previous years. Due to rise in education and household income, a large section of the population is now educated youth, who may no longer be willing to join work that requires low skills and provides low wages
Sector Focus : The Government should prioritise the recovery of the MSME sector in order to create more jobs for the youth, as it has the capacity to provide relevant jobs for educated youth, commensurate with their expectations.
Priority 2: Save the Indian Farmer
More than 50 per cent of the population is dependent on agriculture, though it contributes less than a fifth of the country’s GDP. According to a report by CARE Ratings, the agriculture sector grew at its slowest pace in the last three years — at just 2.8 per cent — and the growth rate this year is expected to be equally sluggish. This year, the monsoons are expected to be below normal, potentially worsening the rural crisis. Providing direct income support to the farmer of ₹6,000 per year is simply a short-term boost and not a long-term practical solution to what ails the farming sector.
Sector Focus : The Government will have to take necessary steps to put more money into the hands of farmers. Banking on the overwhelming mandate they have received in the recent elections, the new Government should work to implement the farm sector reforms suggested by experts and ease farmer distress by breaking up agricultural cartels, eliminating the middlemen, and ending monopolies at local wholesale markets. The Centre should prioritise agricultural exports to help farmers receive their fair share of income.
Priority 3: Tackle Urban Pollution
According to a new study by IQAir AirVisual and Greenpeace, seven of the worst 10 cities, and 22 of the 30 cities worst affected by air pollution are in India. The World Bank has estimated that air pollution costs India nearly 8.5 per cent of GDP, which is expected to worsen with increasing industrialisation in India. In 2019, the Environment Minister, Dr. Harsh Vardhan, launched the National Clean Air Programme (NCAP), that aimed to reduce particulate pollution in India by 30 per cent from 2017 levels by 2024, which could lead to increased life expectancy by 1.3 years.
Sector Focus : The automotive sector in India employs more than 3.5 crore people and contributes nearly half of manufacturing sector GDP. In March 2019, sales growth figures of nearly all segments were in the negative (except commercial vehicles), including vehicular exports. This should not dissuade the Government from sticking to its timelines for implementation of BS-VI emission norms by April 1, 2020. India should also start the process of conversion of all vehicles to run on electric power by 2030, as declared.
In conclusion, the Indian Government should not consider the overwhelming mandate it received in the recent elections as a complete endorsement of its economic policies over the last five years. Leveraging this new mandate, the Government should look at boosting reforms in the agricultural, banking and manufacturing sectors if it is to fast-track economic growth.
(The writer is in the 2nd Year of PGDM at LIBA, Chennai.)