31 Jan 2024 : The Hindu Editorial

Topic 1 : Economic encomium: On the Finance Ministry’s 10-year review of the economy

Context: A glowing 10-year report card must not stoke complacency on what remains undone

Introduction

• Ahead of the Interim Budget for 2024-25 on Thursday, the Finance Ministry’s 10-year review of the economy with some forward outlook, serves as a proxy to the annual Economic Survey. The review signals GDP will grow close to 7% in 2024-25, with scope to go ‘well above’ 7% by 2030.

India's Economic Growth and Challenges

• From about $3.7 trillion this year, India’s economy will expand to $5 trillion in three years, making it the world’s third largest, and could hit the $7 trillion dollar mark by 2030, it reckons.
• Splicing India’s growth story into two phases — 1950-2014, and a ‘decade of transformative growth’ since 2014 — the review stresses that the state of the economy was ‘far from encouraging’ when Prime Minister Narendra Modi ‘assumed power’.
• Growth was hobbled by structural constraints such as tardy decision-making, ill-targeted subsidies and a large informal sector, while inflation was unpalatably high.
• Post-2014 reforms have restored the economy’s ability to grow healthily with “longer and stronger” economic and financial cycles, and made India the fastest growing G-20 nation, it argues.
• The review asserts that India’s 7% growth when the world is growing 2%, is ‘qualitatively superior’ to 8%-9% achieved when the global economy grows 4%, perhaps, hinting at a few years of the UPA era.
• This is debatable as India’s economy is generally delinked from the world with domestic activity driving growth more than exports.

India's Twin-Balance Sheet Problem and Private Investment Revival

• Now that the twin-balance sheet problem inherited from the UPA days has turned into an ‘advantage’, as the review stresses, it must translate into a wider private investment revival.
• That would hinge on a broad-based consumption rebound rather than the K-shaped recovery the government vehemently dismisses. Four years of 7%-plus growth, post-pandemic, would be commendable indeed.
• However, India needs to grow faster to create jobs at the scale its youth need and ensure that a rising growth tide lifts most boats, if not all.
• The review expects an ‘all-inclusive welfare approach’ to help enlarge the consumption base by expanding the middle class.
  • But those dependent on handouts, such as the 800 million that need free food by the Centre’s reckoning, must progressively shrink for growth to be meaningful and equitable.
• The report rightly mentions reforms in learning outcomes, health, easier compliances for smaller firms, as priorities, with some critical changes at the ‘sub-national government’ level to accelerate growth.

Conclusion

• It is also essential that flaws in reforms such as GST are fixed and some of the blunt policy tools deployed, for instance, import licences and price controls on deregulated products, that send convoluted signals about India’s ‘open market with predictable policies’ pitch, are reconsidered.

Topic 2 : A blurred mapping of internal female migration

Context: Women, especially of working age, comprise a greater share of India’s migrant pool but there is little dialogue and flawed data on this important issue.

Introduction

• Internal migration is a crucial form of physical and social transaction in India. The Periodic Labour Force Survey (PLFS), which collects data on employment and unemployment indicators in the country, has estimated it to be 27% from June 2020 to 2021.

Women and Migration

• Normative literature (Rajan et al., 2020; Jesline et al., 2021) usually documents it as a male-dominated narrative. However, women, especially of working age, comprise a greater share of the migrant pool but there is little dialogue surrounding them.
• This is a concern given India’s falling Female Labour Force Participation Rate (FLFPR). It also raises the question of whether women face employment barriers due to post-migration conditions.

Surveys on Women Migration: Misinformation and Underreporting

• National surveys like the PLFS often provide inaccurate information about female migrants, as they only ask respondents about their primary reasons for migration.
• The leading reason for migration among women is marriage (81%), followed by family members (10%), employment (2.42%), and education opportunities (0.48%).
  • Secondary reasons like climate shocks and food insecurity are not included.
• Data from these surveys regarding migrant women's labor force participation can be misinforming.
  • According to the PLFS, approximately three-quarters of migrant women are unemployed, 14% are in self and wage-employed jobs, and 12% are in casual labor.
• This data was collected during the COVID-19 pandemic, which may explain the low numbers but does not adequately underscore the problem of underreporting of their employment status.
• Definitional issues and women's own beliefs also contribute to underreporting of employment of migrant women.
• National surveys often classify women as unemployed, but they often choose forms of employment that allow them to handle their domestic duties while contributing to the household's production or finances.
• This can lead to them misreporting their employment status.

Challenges for Migrant Women in the Labour Force

• The entry of migrant women into the formal labour force is challenging due to the need for more human and social capital.
• 85% of women in the PLFS data have less than 10 years of education, which can create problems. Migrant women are proportionally less employed than non-migrant women, and their lack of social networks can significantly hinder their employment chances.
• These barriers may also explain the dismal recovery of women's labor activity after the pandemic. A Yale University study found that 55% of women never returned to their places of employment after the COVID-19 lockdown, earning only 56% of their pre-pandemic income levels.
• Despite the increase in female migration for labor/employment between 2001 and 2011, they remain largely invisible, facing significant hurdles and marginalization.
• Political parties do not campaign to gain migrant women's votes, leading to a lack of good data on female migrants and treating migrant men and women as the same.
• This results in policy-making that is poorly informed about the needs, motivations, and conditions of female migrants, such as policies like One Nation One ration cards, e-Shram, and affordable rental housing complexes.

Steps to take

• To remedy this, several steps should be taken. National surveys should compile more information regarding their socio-economic conditions post-migration as very little is known about it.
• For instance, the PLFS indicates that a minute percentage (approximately 7%) have access to social security benefits; there is no data for the rest of the populace. There is also a lack of time-use data (Nadal et al., 2020; Charmes, 2019) for migrants, as India has not made that the norm yet.
• Time-use data would significantly help advance existing knowledge regarding unemployed female migrants.

Conclusion

• On a broader scale, a change in narrative is required, starting with an increased collection of female-specific data. It will illustrate the largely anecdotal problem and bring awareness about the plight of these women to encourage progressive policymaking.