Building an inclusive, robust economy!

Building an inclusive, robust economy!

India will be more than a colossal economy if social, political and economic disparities are addressed on priority during Amrit Kaal, that is, the next 25 years

Concerted efforts are afoot to make India a $5 trillion economy. Emphasis is being laid on to increase exports. Many feel that India's exports share in gross domestic product (GDP) should rise to at least 20 per cent or at least a trillion dollars so that we are able to finance our imports and strengthen the rupee in days to come. Notwithstanding the pandemic, the share of India's total exports – goods and services ��� to GDP was 18.7 per cent in 2020-21. Exports were quite remarkable in the last financial year with their share to GDP at 21.7 per cent in the first half (April to September) of 2021-22. The new financial year – 2022-23 – has begun on a very robust note with record exports of $ 38.9 billion in the month of April. The Ministry of Commerce and Industry has pegged the value of non-petroleum and non-gems and jewellery exports in April at $27.16 billion. Our merchandise imports during the month under review was estimated to be $ 58.26 billion, an increase of 26.55 per cent over $46.04 billion in April last year, thus leaving a deficit of $20.07 billion as compared to $15.29 billion in April last year. There is a huge opportunity to further lower our export-import deficit. It won't be unfair to assume that some serious and honest steps are underway at all levels to remove every possible hurdle to see India emerging as a $ 5 trillion dollar economy or even going beyond the set target.

The Ministry of Commerce and Industry on May 4 issued a statement mentioning that India's services exports set a new record of $254.4 billion in the financial year 2021-2022. The new record achieved last year surpasses the previous high of $ 213.2 billion in 2019-20. Services exports also hit an all-time monthly high of $ 26.9 billion in March 2022. The country's overall exports - services and merchandise – touched $676.2 billion in the last fiscal. India's overall exports were pegged at $526.6 billion and $ 497.9 billion in 2019-20 and 2020-21 respectively. It is worth noting that India's merchandise exports crossed $400 billion milestone in 2021-2022 to touch the mark of $421.8 billion, a phenomenal increase of 44.6 per cent and 34.6 per cent over 2020-21 and 2019-20 respectively. Telecommunications, computer, and information services, other business services and transport were the top contributors in services exports during April-December 2021 as per the latest data. Needless to add that the majority of quality job opportunities in these areas are confined to urban elites and some of those who are from the countryside but have been able to move up braving all odds and challenges.

In India, most of poor and low income group people in rural areas and nearby urban townships, where education and health facilities are slightly better, but certainly not on par with what is available to our elite people, whose children lord over creamy opportunities in services sector thanks to the fact that they have financial and other wherewithal to hone in their skills, knowledge and understanding of their dream careers. In a country as socially and economically as diverse and deficient as India, a robust and sustainable economy can be created only by integrating the rural people into the country's mainstream education and health facilities, and emerging job opportunities. At the same time, India cannot afford to ignore agriculture, which is the people's mainstay. Its contribution to the GDP is around 20 per cent. It should be much higher. The Economic Survey-2022 stated that agriculture and allied sectors are expected to grow by 3.9 per cent, industry by 11.8 per cent and services sector by 8.2 per cent in 2021-22.

The sector, which is the harbinger of hope and livelihood for the majority people, must grow at the rate of 10 per cent to bring in resilience, inclusion and sustainability in the economy. As per the Census 2011, conducted by the Registrar General of India (RGI), the total number of agricultural workers in the country have increased from 234.1 million (127.3 million cultivators and 106.8 million agricultural labourers) in 2001 to 263.1 million (118.8 million cultivators and 144.3 million agricultural labourers) in 2011. However, the share of workforce engaged in the agriculture sector comprising cultivators and agricultural labourers has come down from 58.2 per cent in 2001 to 54.6 per cent in 2011. Migration of agricultural labour from rural to urban areas is a phenomenon driven by a development process, which is not inclusive and efficient. Over the years agriculture and allied sectors have by and large been used as a part of vote bank politics. During sowing and harvest seasons, India witnesses a huge movement of poor and low income people to their rural habitats only to return to their urban destinations after a couple of months or so.

Let's have a serious look at the fundamentals of some of the world's leading economies and how they have been able to achieve the milestones, which have become points of reference to experts and even to the ordinary people. The US continues to remain the biggest economy of the world and the biggest contributor to its GDP is the services sector consisting of business services, healthcare, insurance, finance and real estate. Next to the US is China, whose economy is driven by the manufacturing sector. China is perhaps the only economy in the world, which lays a lot of emphasis on the resilience of the domestic manufacturing sector. Japan, though so small but highly disciplined, has been able to build a vibrant economy by virtue of its advanced technological know-how. Its manufacturing and export oriented economy makes Tokyo omnipresent. There is hardly any country in the world where Japan does not have its trade share. Like Japan, Germany has been able to build a vibrant economy thanks to a highly skilled workforce and export of vehicles, machinery, chemicals and manufactured goods. It is worth noting that Japan and Germany were left devastated in World War II. The UK economy is also largely driven by the large scale services sector, particularly in finance, insurance and business services.

One thing which is so common among these countries is the uniform quality of education which is being imparted to students at all levels irrespective of how affluent and powerful the families and parents of the students are. In India, quality education facilities in the private sector are a prerogative of rich children as they have both resources and talent. Talented poor students stand no chance to be there and not even quality government institutions as being there also entails huge investment. Finally, the majority of poor and low income students have to be dependent on what is within their reach. It is here India has been faulting since 1947. By not bridging the gap between the qualities of education meant for rich students and that of their poor counterparts, we as a nation are sustaining critical gaps for reaping political benefits through short-term relief measures for the vast masses. It is the only reason that when poor students enter into top seats of learning through affirmative measures they have to struggle a lot to cope with course pressure and accompanying socio-economic trauma.

India will be more than a colossal economy if social, political and economic disparities are addressed on priority during Amrit Kaal, that is, the next 25 years. Our share in global services exports will multiply manifold if we provide quality and uniform education to all by adopting a uniformity education quality code (UEQC) and ensuring its implementation at all levels. Imagine the kind of boost that will be rendered to growth in gross exports of services, aided by exports of software, business and transportation services, if the skill and overall quality of India's human capital shoots up. The country's overall services sector grew by 10.8 per cent year on year (YoY) in the first half (H1) of 2021-22. The Government of India has identified 12 Champion Services Sectors for promoting their development, and realizing their potential. These include Information technology and information technology enabled services (IT &ITeS), tourism and hospitality services, medical value travel, transport and logistics services, accounting and finance services, audio visual services, legal services, communication services, construction and related engineering services, environmental services, financial services and education services. Is the education which is being accessed by the vast masses in sync with the needs and dynamics of these sectors? Certainly, not! Thus, they will never be an active partner of competitive sectors such as services and manufacturing and will never be paid adequately. How to bridge this gap? It is a trillion dollar question and needs to be answered sooner the better!

(The author is a senior journalist, author and columnist. The views are strictly his personal)

Show Full Article
Print Article
Next Story
More Stories