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What's the article about?
- It talks about the income problem in the Indian economy.
Relevance:
- GS3: Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development and Employment
Context:
- The article discusses the income problem in the Indian economy, emphasizing that incomes are not growing sufficiently or sustainably for a large number of people.
- Despite good overall GDP growth, there is increasing pressure for job reservations for economically weaker sections, regardless of caste or religion. Economists are debating whether the economy is creating enough jobs and questioning the veracity of the government's data.
Analysis:
- Income Problem in the Indian Economy:
- Incomes are not growing sufficiently or sustainably for a large number of people in the Indian economy.
- Despite good overall GDP growth, there is a disparity in income growth.
- Large numbers of people are facing income stagnation or inadequate income growth.
- Job Reservations and Debates:
- There is increasing pressure for job reservations for economically weaker sections, regardless of caste or religion.
- Economists on both sides are debating whether the economy is creating enough jobs.
- The veracity of the government's data is being questioned.
- Some argue that the problem of growth with insufficient jobs is due to the policies of the present government rather than the previous one.
- The U.S. Economy:
- The U.S. economy seems to be doing well according to headline economic numbers, but there is dissatisfaction among a large majority of U.S. citizens.
- Growth is good, and employment numbers have been improving.
- Polls show that many U.S. citizens are dissatisfied with the state of the economy.
- The dissatisfaction has become a major issue before the upcoming presidential elections.
- The U.S. President supported striking autoworkers demanding a fair deal from their employers.
- U.S. statistics of growth and employment are not measuring what really matters to common citizens, who want fair deals and adequate and secure incomes to cope with inflation.
- Jobs that are not 'good':
- The overall problem of incomes in India is that insufficient numbers have moved out of agriculture into manufacturing.
- Historically, sustainable growth in all countries, including the U.S. and China, involved a shift from agriculture to manufacturing.
- In the 1990s, India attempted a shortcut by promoting growth in exportable Information Technology services.
- However, there is limited room in high-end services to absorb the large number of young Indians in need of jobs.
- These jobs also require levels of education that people in rural areas may not have.
- To address the income problem, individuals need jobs that fit their present abilities and provide opportunities for skill development and higher earnings.
- Labor-intensive manufacturing, services, and construction can provide the first step for millions of Indians who have moved out of agriculture in the last three decades.
Way Forward: Need for a Paradigm Shift in Economic Valuation
- The current economic paradigm places too much emphasis on corporate enterprises and economic efficiencies, while undervaluing caregiving and other forms of work that are essential to society. This paradigm shift has led to a number of distortions, including:
- A decline in the care that humans can and should give each other
- An overemphasis on GDP growth as a measure of economic well-being
- A neglect of the needs of workers, small-holding farmers, small entrepreneurs, and women
- In order to address these problems, we need to reform our measurements of economic growth and employment to reflect the forms of work and enterprises that we want more of in the future. We also need to start listening to those who have been overlooked in the past, such as caregivers and women.
