Indian Economy: Ten ways to ensure sustainable well-being for all and an inclusive India

The Covid-19 pandemic and the Ukraine crisis have hampered progress on poverty reduction in 2011-2019. As the Inequality Report points out, with a monthly income of 25,000 you are in the top 10% of earners! High inflation hits the poor hardest. Employment is increasing, but not fast enough. While farming has been a source of jobs in Covid-19 times, there are many youth who have been forced out of farming and whose aspirations lie in manufacturing and the service sector. The IT sector has expanded, but skills issues need to be addressed.

Rising living costs and a surge in LPG gas prices have meant hard times for poor households. With India’s public debt already at 90% of its GDP, there is little fiscal space to increase spending to boost demand. Everyone is hoping that the infrastructure pipeline and PLIs will support growth. While India has outperformed most countries on growth and inflation, the fragility of those on the brink of poverty makes the challenge daunting. Businesses will not deliver the kind of inclusive growth needed to sustain poverty reduction gains. While the continuation of free rationing systems may have helped households with food security, it is not enough to keep them in a state of well-being.

Inequalities need to be addressed more directly.

First, schools and qualification programs must be prioritized for each village/urban cluster. Local governments, SHGs and cooperatives need to be involved in the management of these programmes. Hybrid learning support through interpersonal and digital needs to be operationalized immediately. Involving youth in skills with support for IT-based hybrid learning is needed. Panchayats and local governments must help improve schools and skills. This is not the time for top-down reform. Local government grants could focus on education, health and nutrition.

Second, the infrastructure pipeline needs a community-led partnership for rapid adoption. The location of job opportunities in highways and other construction works needs to be studied. Tasks can be delegated to local women’s self-help groups, cooperatives and panchayats. Many infrastructure programs do not internalize the whole-of-government, whole-of-society approach. The Corporate Social Responsibility of companies should contribute to the holistic development of local communities.

Shakti initiatives and internet connectivity boost can be accelerated.

Third, in Tier 2 and Tier 3 cities, some local infrastructure needs to be considered. Identify the missing infrastructure standing in the way of “one district, one product” or other high-value manufacturing hubs.

Fourth, the Finance Commission has already advocated Panchayat-led primary health care in rural and urban areas. It is a good idea to invest in developing an HR continuum for ASHAs who become Nurses and ANMs. Urban primary health care needs immediate reinforcement and staffing boost. Uninterrupted medication and diagnostics, as well as connecting each household to a local primary health facility nearby, will help reduce costs for poor households. Campaigns like Gram Swaraj Abhiyan to ensure pro-poor public welfare services reach the urban poor are needed.

Fifth, it is time to start thinking seriously about growing inequality. It is the state’s social responsibility to ensure that financial resources are used optimally. There are strong arguments for higher taxes on the very rich class.

Sixth, greater efforts are needed to get state and local government ownership of new initiatives. Niti Aayog has an important federal role to play, actively working with states to accelerate infrastructure projects.

Seventh, a village or urban bastion must be developed as a unit to monitor the impact of all interventions.

Eighth, the flow of credit to women in SHGs and community organizations whose non-performing loans are low must be secured. Where social capital exists, funding through the Joint Liability Group will allow for greater diversification with scaling for local products. Funding street vendors need to be deepened. Community monitoring and social audit must be institutionalized in all government spending.

Ninth, it is time that workfare programs were designed as local infrastructure programs in rural and urban areas, using machines and semi-skilled labor to efficiently use public resources. The creation of water bodies, anganwadi buildings, schools, local marketplaces and infrastructure at the local level can be part of local workfare programs with an infrastructure focus.

Tenth, a review of the PLIs is required to ensure that no subsidies create a disincentive for innovation and cost reduction on behalf of Atmanirbharta. Scarce public resources must ensure profitability and growth. The improvement of pensions for disadvantaged elderly, widows and divyang must be supported for maximum social protection.

An ‘India for all’ needs ‘all government, all society’ and community-led action with performance monitoring at the local level. At the same time, our quest to expand Ease of Doing Business should aim to be in the top 50 human development by 2047, since human development alone paves the way for economic progress. Providing opportunities for all to develop their full human potential is the only path to sustainable well-being for all and an inclusive India.

The author is a retired civil servant with an interest in the social field

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