Jobs or Entitlements?

Jobs or Entitlements?

The emphasis on building infrastructure and boosting manufacturing in the recent Budget proposals is with a view to create millions of new jobs. Jobs that are needed by our huge working-age young population, both in urban and rural areas, but particularly in rural areas, which house 60% of the population.

The budget proposals on boosting infrastructure/manufacturing were further welcomed, particularly because an investment road map stretching over five years was also outlined. Combined with a reduction in corporate taxes, it will certainly boost our GDP, starting to seriously perk up already.
 

But with agriculture accounting for only 15% of GDP, farming and related services cannot properly support 60% of the population. It doesn’t do so in any developed country either, where a small few turn out prodigious amounts of food using technology and mechanization, and yes some seasonal labour. We need this to happen here too, along with considerable agro-industry and other value-addition. The percentages could then change along with the viability.

As it is today, those amongst the landless, who could, have already migrated to the cities, and constitute part of their population of the 40% remainder. Still, our unemployment and inadequate employment figures are very high, urban and rural alike, affecting at least 25% of the total population of 1.3 billion people.

Without changing this drastically, by providing, as far as possible, trained and skilled employment, this country cannot make any substantial and inclusive economic progress. The Modi Government is acutely aware of this fact. It is making strenuous efforts to get the economy, its blocked projects, its enabling legislation etc. moving again on an urgent basis.

But the culture of entitlement, the disregard for strengthening the economy versus populism, has  built-up over decades of socialist practice. It tends to get in the way at every turn. The resistance to a viable Land Acquisition Act is a case in point, wherein the ‘consent’ clauses could stop all acquisition, given the aggressive and polarised political stands taken by large sections of the Opposition.

If land acquisition is framed as ‘anti-farmer’, then industry and infrastructure cannot grow. It is another matter that farming is in itself a poor remunerator presently, dependent on subsidies and grants. The only profits of note being earned out of it are made by the many middlemen that take farm produce to market. Of course, because farming activity feeds us, it has a strategic dimension much beyond the commerce involved.

However, playing at killing two birds with one stone, providing so called rural employment  via the  inefficient, slow  and wasteful hand- building of rural infrastructure, at subsistence wages for manual labour, or less, plagued by corruption, is certainly not the answer!

That is why, the retention of MNREGA in this 2015 Budget, and the Rs. 34,000 crores allocated for it with a possibility of topping it up to Rs. 40,000 crores is an example of the ‘entitlement’ Raj we want to get away from.

Welfarism, particularly when carried to excess and extremes, prevents us from building a robust economy that works to banish poverty once and for all. Entitlements and welfare measures may seem fair and welcome, but they are not productive.

It is clear that the Modi Government did not abolish MNREGA, as it deserved, to prevent a socialist backlash. But the culture of subsidies, entitlements, grants and waivers are draining resources that could be put to much more productive use.

Also, after several years of a slowing economy, the recent turn- around has yet to show very many results on the ground. The core sector industrial statistics are still depressed, as are the manufacturing and construction indices. The only tangible growth seen so far has been in the stock markets and they are definitely signaling great optimism about the future.

And while the economy is gestating, there is a considerable churn in the popular attitudes. Traditional attitudes, many of which are out-of-date in the 21^st century, including oppressive views about the emancipation of women, are clashing with a modernist world view. The underclasses, unable to access the good life for want of money and sophistication are smashing and grabbing at it anyway. A majoritarian Hindu view is battling it out with a tolerant pluralistic outlook. Fringe elements, Hindu, Muslim, Christian, are creating as much hatred as they can with a view to radicalise their constituencies. The social fabric of this country is in flux, and trying subconsciously, to outgrow and discard its long-time Nehruvian moorings.

With the steep decline of the Congress Party and its share of the popular imagination, it was perhaps inevitable. A new India is forming, but right now it is still at the messy, under-construction stage. 

For: NitiCentral

(778 words)

March 8^th, 2015

Gautam Mukherjee