Indian Economy and issues relating to planning, mobilisation of resources, growth, development and employment.

The findings from the World Inequality database for the years 2022-23 reveal that the top 1% of the population received 22.6% of the national income, marking the highest proportion since 1922. Additionally, wealth inequality is even more pronounced, with the top 1% holding a staggering 40.1% share of the total wealth. It is imperative to examine the consequences of such unequal distribution of wealth and income.
Causes of unemployment:
i. Skill gap: India has a large number of educated youth, but their skills often do not align with the demands of the job market. eg. Over 80 per cent of them are unemployable for any job in the knowledge economy, according to a report by the employability assessment company Aspiring Minds.
ii. Informal sector pre-dominance: The informal sector, including small-scale enterprises and unorganised labour, absorbs a substantial portion of the workforce. However, these jobs often lack job security, social benefits, and career progression, resulting in underemployment and instability.
iii. Population growth: As the population expands, the economy must generate sufficient employment opportunities to accommodate the increasing labour force.
iv. Regional disparities: Uneven economic development across states in India results in migration from less-developed regions to urban centres in search of employment. eg. UP and Bihar.
v. Agricultural dominance: agriculture employs about 40% of the workforce but contributes only 15%-16% to the GDP.
vi. Wage expectations: Mismatched wage expectations can impede job Recent graduates may hold overly optimistic salary expectations.
Strategies to address inequality and joblessness:
i. Taxation Reform: Implement progressive tax reforms to ensure that the wealthy contribute their fair share to society. This includes increasing the tax-GDP ratio, making the tax structure more progressive, and reducing reliance on regressive indirect taxes.
ii. Welfare Spending: Increase public spending on welfare and social sectors such as health, education, and employment guarantee programs like the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). This will improve access to essential services and create employment opportunities for the poor.
iii. Job Creation: Focus on generating quality employment by investing in infrastructure, small and medium enterprises (SMEs), and skill development programs. Governments should also prioritise filling existing job vacancies in critical sectors like health, education, and social services.
iv. Labour Market Reforms: Implement labour market reforms that ensure fair wages, improved working conditions, and gender equality in the workforce. This includes enhancing the quality of jobs in sectors like healthcare, education, and social services.
v. Promotion of Inclusive Growth: Encourage inclusive growth by supporting sectors that are more labour-intensive and promoting entrepreneurship among marginalised communities. This will help reduce income inequality and create opportunities for all segments of society.
vi. Investment in Human Capital: Invest in human capital development through initiatives like quality education, healthcare, and skill training programs. This will enhance the productivity and employability of the workforce, leading to sustainable economic growth and reduced inequality.
vii. Gender Empowerment: Promote gender empowerment through policies that support women’s participation in the labour market, provide maternity entitlements, childcare support, and ensure safe and affordable transportation and accommodation for women workers.

To achieve a growth model centred on employment, governments should prioritise supporting small and medium-sized businesses that require more labour, invest in skill training and human capital development (especially in health and education), and enable women to join the workforce by offering benefits like maternity leave, childcare support, and accessible transportation and housing. Addressing the employment challenge is crucial for tackling inequality.

Source The Hindu

Leave a Reply

Your email address will not be published. Required fields are marked *