5 Feb 2024 : Indian Express Editorial Analysis

Indian Express Editorial Analysis

5-February-2024

1. Changing gears to grow

Topic: GS3 – Indian Economy GS2 – Governance This topic is relevant for Mains in the context of a comprehensive analysis of the government’s performance, challenges in the agriculture sector, and proposed strategies for inclusive and sustainable growth.

Context:

As India gears up for parliamentary elections, Prime Minister Narendra Modi places his major development plank on “Viksit Bharat Sankalp by 2047” (Developed India by 2047), focusing on inclusive and sustainable growth. PM Modi emphasizes a promise of “Ram Rajya,” indicative of an inclusive and sustainable growth model. His confidence in winning more seats in this election stems from the performance of his government over the last decade and the promise of development by 2047.

More about the news:
Post-COVID Economic Recovery:

• The Modi government has shown commendable performance in the post-COVID recovery period, with the Economic Review by the Department of Economic Affairs projecting over 7% GDP growth for three consecutive years (FY22 to FY24).
• This surpasses the global average and growth in most G20 countries, instilling confidence in the economic trajectory.

Comparative Analysis: Modi Government vs. UPA Government:

• A comparative analysis of the Modi government’s 10-year tenure with the UPA government on key parameters reveals macro-economic achievements.
• India’s real GDP grew by 5.9% per annum between FY15-FY24, with a lower CPI inflation rate of 5.1% compared to 8.1% during the UPA period.
• Multidimensional poverty decreased significantly, and the unemployment rate dropped from 6% in FY18 to 3.2% in FY23.

Challenges in Agriculture Sector:

• Despite overall economic growth, challenges persist in the agriculture sector, employing 45.8% of the working population.
• The sector’s growth rate is projected to be 1.8% in FY24, raising concerns about the effectiveness of the inclusive growth model and the promise of doubling farmers’ real incomes by FY23.

Strategies for Inclusive and Sustainable Growth:

• Moving forward, achieving inclusive and environmentally sustainable growth requires reorienting subsidies towards sustainable development expenditures and fiscal consolidation.
• The interim Union budget for FY25 demonstrates a provision of Rs 47.6 trillion for expenditure and aims to reduce the fiscal deficit from 5.8% of GDP in FY24 to 5.1% in FY25.

Rationalizing Subsidies for Development Focus:

• Major welfare subsidies, including fertiliser, food, MGNREGA, and PM-KISAN, need rationalization and targeting to redirect resources towards development expenditures and environmental sustainability.
• This includes investments in agri-R&D, micro-irrigation, rural roads, agri-marketing infrastructure, and building efficient value chains.

Gender-Inclusive Initiatives:

• The FY25 budget allocates increased funds for the Department of Fisheries, Animal Husbandry, and Dairying, recognizing their significant contribution within the agri-sector.
• Additionally, there is commendable progress in the allocation for the PM Awas Yojana (Gramin), with over 70% of houses allotted to women as sole or joint owners, promoting permanent asset creation and enhancing livelihoods in rural areas.

Synchronizing MGNREGA and PM Awas Yojana:

• An innovative step in synchronizing MGNREGA in rural areas with the PM Awas Yojana is proposed, aiming to provide every household with a reasonably good shelter, aligning with the vision of “Ram Rajya” in rural areas.

Conclusion:

• The article concludes by emphasizing the need for continued efforts to achieve inclusive growth, address environmental challenges, and synchronize welfare programs for maximum impact.
• The proposed initiatives not only contribute to sustainable development but also hold the potential to influence electoral outcomes positively.

Practice Question:  Discuss the challenges faced in the agriculture sector over the past decade and analyze the strategies proposed for achieving inclusive and environmentally sustainable growth. (150 words/10 m)

2. Budget questions, no answers

Topic: GS3 – Indian Economy – Government Budgeting This topic is relevant for both Prelims and Mains in the context of the economic and developmental policies of the government, touching upon poverty, income distribution, and demographic segments’ progress.

Context:

The Finance Minister’s presentation of the interim budget adheres to its purpose – seeking authorization for spending on critical schemes until the new government is in office. While much commentary has focused on fiscal numbers, this analysis delves into the broader issues raised by the budget.

More about the news:
Report Card and Demographic Focus:

• The budget speech offers a report card of the Centre’s achievements since the 2014 regime change, emphasizing the progress of four key demographic segments: the poor, women, youth, and farmers.
• The overarching theme is that these segments have shown substantial improvement compared to the pre-2014 era.

Challenges in Data Comparison:

• However, comparing pre-2014 and post-2014 data, especially regarding poverty, poses challenges.
• The absence of recent national consumption expenditure surveys makes it difficult to assess whether the decline in poverty has accelerated in the last nine years compared to the two previous decades.

Multidimensional Poverty Index (MPI):

• The Finance Minister cited the MPI to claim that 25 crore people have emerged from poverty since 2014.
• However, the MPI’s 12 indicators, grouped into health, education, and standard of living dimensions, make it hard to directly compare with previous Head Count Ratio (HCR) numbers.

Income Growth and Inequality:

• The statement about a 50% increase in average real income prompts questions about the distribution of income.
• Assessing changes in inequality before and after 2014 becomes crucial.
• There’s speculation about a K-shaped income growth, implying a growing divergence between the top and bottom income groups.

Women’s Role and ASHA Workers:

• The Finance Minister highlighted women’s enrollment in self-help groups and the commendable work of ASHA workers.
• However, concerns linger about the remuneration and benefits of ASHA and Anganwadi workers, frontline health and care workers.

Challenges for Viksit India@2047:

• The question arises – if India is performing exceptionally well since 2014, why wait until 2047 for Viksit India?
• Possible challenges include:
  • the underrepresentation of women in decision-making,
  • a jobs crisis,
  • youth unemployment,
  • stagnant agricultural incomes,
  • concerns about inclusive growth,
  • the potential constraint posed by inequality.

Conclusion:

• The analysis underscores the need to address underlying challenges for sustained and inclusive growth.
• Despite the positive narrative, the budget raises questions about the timeline for overcoming persistent issues, prompting speculation about the trajectory of India’s development journey.

What is Vision India@2047?

Vision India@2047 is a project initiated by the NITI Aayog, the apex policy think-tank of India, to create a blueprint for India’s development in the next 25 years. The project aims to make India a global leader in innovation and technology, a model of human development and social welfare, and a champion of environmental sustainability. What are the Aspects of Viksit Bharat? Structural transformation: This refers to the shift of resources from low-productivity sectors (such as agriculture) to high-productivity sectors (such as manufacturing and services). This can boost economic growth, create jobs, and reduce poverty. Organising labour markets: This involves improving the quality and quantity of labour supply, enhancing the skills and employability of workers, and ensuring fair and efficient labour regulations. This can increase labour productivity, reduce informality, and promote social protection. Increasing competitiveness: This entails enhancing the efficiency and innovation of firms, improving the quality and diversity of products and services, and expanding the domestic and international markets. This can foster economic dynamism, increase exports, and attract investments. Improving financial and social inclusion: This implies expanding the access and affordability of financial services and social welfare schemes for the poor and marginalised groups. This can improve their income, savings, and consumption, as well as their health, education, and empowerment. Governance reforms: This involves strengthening the institutions and processes of governance, such as the rule of law, accountability, transparency, and participation. This can improve the delivery of public goods and services, reduce corruption, and enhance trust and legitimacy. Seizing opportunities in the Green Revolution: This refers to adopting and promoting green technologies and practices, such as renewable energy, energy efficiency, and climate resilience. This can reduce greenhouse gas emissions, mitigate environmental degradation, and create new opportunities for growth and development.

PYQ: Women empowerment in India needs gender budgeting. What are the requirements and status of gender budgeting in the Indian context? (200 words/12.5m) (UPSC CSE (M) GS-3 2016)

Practice Question:  Assess the challenges raised for achieving ‘Viksit India@2047’ and the broader implications for sustained and inclusive development. Provide policy recommendations for addressing the identified challenges in the Indian economic landscape. (250 words/15 m)

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