Topic 1 : The state of the Indian economy today
Context
The state of the Indian economy today and its prospects have to be based on mathematics and statistics. We can get a reality check on the economic growth rate by examining the three conclusions that emerge today based on data published by the National Statistical Office.
About the data
- First, India’s GDP growth rate declined annually from 2016-17, and fell below 3.5% in the fourth quarter of 2019-20.
- Second, it is essential to recognise that since 2020, the current govt widely publicised ‘vikas’ or development model in reality achieved the so-called “Hindu rate of growth” in GDP, which had been “achieved” during the socialist period of 1950-77.
- Third, in P.V. Narasimha Rao’s and Manmohan Singh’s tenures as Prime Minister, India departed from the socialist path and the GDP growth rates rose for the first time to 6%-8% per year and over a 15-year period i.e., between 1991-96 and 2004-2014.
- That is, it took Rao and Dr. Singh to understand and reform the Indian economic system, reduce state participation, and increase incentives for capital and labour providers, and achieve a higher and faster growth rate.
The issues
- The continuous decline in the GDP growth rate began in 2016 and continues even today.
- Furthermore, not only has the GDP growth rate been declining since 2016, but brazen announcements of rosy predictions were and are being published annually in the media, with outrageous claims.
- One such claim made in 2019 was that India will become a $5 trillion economy by 2024 but there has been no policy structuring presented to achieve this aim nor has anyone in the government shown willingness to debate it on public fora.
- Post-COVID-19, we hear and read in the media that the growth rate of GDP is around 6% + annually. But this is misleading and deliberately so because what is not disclosed is that the growth rate includes recovery as well, since 2020-22.
Solutions
- In this decade of weak demand and relatively excess supply, resources mobilised by the government should be largely through indirect taxes and also through the liberal printing of currency notes to generate demand from non-rich citizens.
- The annual interest paid on fixed-term savings in the bank accounts of the middle class should be higher, at 9% or so.
- The interest rates on loans issued to small and medium industries should be no more than 6% on the loans. These essential reforms need to be carried out to generate non-inflationary demand.
- The market system is not a free-for-all or ad hoc measure. Therefore a market system with transparent and minimal regulation works since the principal drivers are incentives and domestic savings whose deployment for innovation pushes up factor productivity and thus the GDP growth rate.
- The trade-offs through affirmative action, social security, and safety nets are essential for creating a stake for the poor in the system and level the playing field to create hope, ensure transparency, accountability, trusteeship as well as corporate governance to legitimise profit-making that will drive the market system.
- Deregulation should also not mean that we reject government intervention for safety nets, affirmative action, market failures, and creating a level-playing field.
- Democratic institutions have to be empowered to guard against public disorder arising from rapid deregulation, as it happened in Russia post-1991.
Way forward
India urgently needs a new economic policy that is based on clearly structured and stated objectives and priorities, and a strategy to achieve the targets, with an intelligent and transparent resource mobilisation plan to finance the policies.
Topic 2 : A global alliance to bridge the gender equity gap
Context
India’s launch of the Alliance for Global Good – Gender Equity and Equality is a step towards enabling ‘equity’ and ‘equality’
Equity and Equality
- Equality and inclusion are the cornerstones of India’s development journey.
- The New Delhi Leaders’ Declaration, which was adopted at the G-20 under India’s presidency, is testament to this commitment.
- By prioritising inclusion at the centre of focus areas such as socio-economic empowerment, bridging the digital divide, driving climate action, ensuring food security, nutrition, health, and well-being, among others, the declaration underlines the need for advocating a growth agenda that is driven by women-led development.
- At the World Economic Forum in January this year, India took the mission for gender equity several steps ahead with the launch of the ‘Alliance for Global Good – Gender Equity and Equality’.
- With the Alliance, India has managed to transition the two buzzwords, equity and equality, to the working agendas of stakeholders around the world.
Bolstering governance
- Mainstreaming gender equality and equity has been a key development area for the Government of India for over a decade now.
- The passage of the Women’s Reservation Bill last year, ensuring reservation of a third of seats for women in Parliament and the State Assemblies, is a revolutionary tool for women’s empowerment and is expected to contribute extensively to improving the processes of India’s governance.
- Allocations of nearly $27 billion under the gender budget in 2023-24 are a manifestation of the commitment of the government to advancing women-led development.
- There has been an increase in India’s female labour force participation rate, from 23.3% in 2017-18 to 37% in 2022-23 According to the annual Periodic Labour Force Surveys.
- Female enrolment in higher education has gone up by 28% in the last 10 years.
- In terms of enrolment in science, technology, engineering, mathematics (STEM) courses, the share of women is a significant 43%, which is one of the highest enrolment rates in the world.
- Even within rural India, there is a participation of over nine crore women in 83 lakh self-help groups, improving the socio-economic conditions in rural areas. All these provide a glimpse of women-led development that India is witnessing.
An Indian contribution at Davos
- The enthusiasm around the We-Lead Lounge set up by the Ministry of Women and Child Development and the Confederation of Indian Industry at Davos, saw global interest and curiosity.
- It served as a platform to have many meaningful deliberations around how the world can contribute, join, and drive inclusive development.
- The Alliance, anchored by the CII Centre for Women Leadership, guided by the Minister of Women and Child Development, Government of India and supported by the Bill and Melinda Gates Foundation, will have a global network of experts, think-tanks, industry and country leadership that will drive collective actions to augment women empowerment.
An opportunity
- With an overarching goal to share and develop scaleable and practical solutions for advancing women-led development in the areas of ed-tech, medical capacity building, and delivery of health interventions for women, learning and skill development, agrotech, women enterprise development and unlocking capital to enable stronger gender outcomes, the Alliance brings together stakeholders on this critical global development agenda.
- India’s leadership in these areas is proven, gaining the label of “pharmacy of the world”.
- India’s digital prowess is also well known.
- The alliance is yet another example of leadership, as India accepts responsibility to provide shared direction to stakeholders globally.
Conclusion
Given India’s abiding commitment to ‘Vasudhaiva Kutumbakam – One Earth, One Family, One Future’ and its continued efforts towards Sabka Saath, Sabka Prayaas, Sabka Vikaas, this Alliance for Global Good – Gender Equity and Equality is poised to be a force to reckon with on all gender-related issues.