The road to Viksit Bharat is peppered with challenges

PRIME Minister Narendra Modi’s Independence Day speech offered a useful insight into his key goals to take the economy forward. One is to transform agriculture and make it more robust so as to combat the growing unpredictability of monsoon and address climate change.

In the manufacturing sector, the aim is to utilise the PLI (production-linked incentive) schemes in order to design in India for the world, thus making the country a global manufacturing hub.

The overall aim of economic development will be to uplift the poor. Significantly, there was no mention in the speech of the sharp disparity between the few who are extremely wealthy and the vast number of people who are poor.

In 2022-23, the top 1 per cent of the Indians earned Rs 53 lakh each. In stark contrast, those falling in the bottom 50 per cent earned merely

Rs 75,000 each. Likewise, in 2022, the top 1 per cent pocketed 22.6 per cent of the income, while the bottom 50 per cent managed to get just 15 per cent of it.

Notably, the top 1 per cent controls 40 per cent of the country’s total wealth. And the disparity is only growing bigger with time. The richest 1 per cent of India’s population currently has the highest concentration of wealth it has had in six decades.

While inequality soars, the economy has a lot going for it. India is the fastest-growing large country in the world, with the economy growing at an average rate of around 8 per cent. Besides, the inflation rate is well within the RBI’s range. The Indian stock market is among the most preferred in the world, surpassing the sentiment for the Chinese stock market. The Union Budget has also addressed one of the laggards, consumption, allowing infrastructure spending to take a back seat.

So, where do we go from here if the foremost goal is to address the severe inequality, which is underlined by widespread poverty? According to the Asian Development Review (2017), extreme poverty stood at 18.5 per cent in Bangladesh, while in India, it was 21.6 per cent. In contrast, Sri Lanka recorded just 1.9 per cent poverty.

The quickest and surest way to address poverty is to create more jobs, offering people better-paying employment over time. Since rural areas witness a higher level of poverty, the key will be to create more and better jobs there.

But we have to sort out a contraction. As agriculture is made more robust, better seeds, pesticides and tillage will be arranged with the help of greater mechanisation. This will modernise agriculture. But the resulting higher output will be delivered through fewer hands. So, even if we raise farm incomes, what will those rendered jobless do?

The workers thrown out of farms will have to find employment in rural services. As rural agricultural incomes grow, there will be a rise in the number of rural roads, TV sets, smartphones, motorbikes and fast-moving consumer goods like soaps and hair oil. These will have to be sold and serviced. In rural areas, more and more people will be engaged in this exercise than in actual farming.

But the rise in rural services will not be able to take care of all the farmhands who are made redundant. A significant number of people will have to move to urban areas in search of employment. We are witnessing a steady flow of unskilled workers into urban areas, looking for jobs. And they stay wherever they can, resulting in the mushrooming of unplanned urban slums with little or no amenities.

One major policy challenge will be to find rural migrants better-paying jobs in the organised sector in urban areas. Over time, the jobs in this sector will enable the workers to afford basic needs and lead a decent life. The migrants from rural areas generally join microbusinesses, which are mostly not incorporated. They function on a day-to-day basis. Inputs are acquired and workers are paid when cash comes in. But if they run out of cash, it could mean the end of the business. And the workers will then have to look for other equally unstable jobs.

For the bottom 50 per cent to earn more, the policy will have to work on several fronts. It would require workers in the informal sector to make more money. But in order to earn more, they must possess basic skills. For that, it is necessary for them to receive a minimum level of education and acquire rudimentary skills.

There are some state and Central schemes, like Ayushman Bharat, that cover one’s basic healthcare needs. Plus, efforts are on to provide at least middle-school-level education to all. It seeks to ensure that everyone can master basic language comprehension exercises and do simple arithmetic calculations. Besides, there is a push to improve the standards of industrial training institutes.

The PM has announced the setting up of 75,000 medical seats so that the country can become a global hub for international students. While the plan is welcome, there is a need to first deliver on the basics highlighted above. The PM has outlined his vision to make India a developed nation (Viksit Bharat) by 2047. But for that to happen, steps will have to be taken today.