Economic agenda of new government: Jobless growth can't go on forever; it is time employment became focus

In the rough and tumble of electioneering, issues had a very short shelf life with politicians providing fresh grist every day to the Opposition. But in the grinding and tortuous process of creating economic opportunities, five years often prove to be woefully inadequate. The new government to be sworn in after 23 May must have its economic agenda ready, the one that is rooted in sound economics, away from the here and now of populism.

 Economic agenda of new government: Jobless growth cant go on forever; it is time employment became focus

Representational image. Reuters

The new government, as a part of a comprehensive economic package for the nation designed to address the massive 8 percent unemployment rate, must announce a huge industrial park in Jammu and Kashmir (J&K). There is a huge sense of alienation besides the empty-mind-is-devil's workshop dictum playing out there. The central government together with the state government must set the pace and give the lead by setting up a massive silk or carpet-making facility the state is justly famous for as a 100 percent export-oriented unit. Private capital shies away from the state fearing terrorists’ attacks. The government must lead from the front to address this genuine fear. Private capital will automatically follow.

Chennai has been facing water crisis for decades now. Yet its denizens have been left to fend for themselves by investing in water table depleting borewells. The state has woken up to the potential of desalinated water from the sea quenching its thirst but the criticism has been it is highly expensive. It is time the Indian government took the lead and signed a collaboration agreement with Israel which now depends on desalinated water for as much as 40 percent of its water needs. It reportedly cuts cost through intelligent and frugal engineering practices. Chennai is not alone in grappling with the water crisis. Large swathes of the nation are.

The point is the central government must play a catalytic and path-breaking role in economic activities without spreading itself thin. The Narendra Modi government was obsessed with fighting black money so much so that it gave short shrift to creating massive employment opportunities the country needed.

To be sure, black money must be fought but through the carrot-and-stick of mainstreaming measures like goods and services tax (GST).

There is a huge potential for agro-based industries in the country that would at once provide employment, stop the urban exodus and minimise farm wastage in the form of loss to the elements. If the BJP returns to power, it can blaze the trail in this regard by forming AMUL-like producers’ cooperatives in rural areas so that farming does not remain hostage to nature and primitive practices.

Fuel, i.e. petroleum products, must be immediately brought within the ambit of GST. It would bring down the bunk prices by a whopping 50 percent. Let this sensitive product not be the milch cow for governments both at the center and states. The resultant loss of revenue should be made up for through Robinhood taxation.

There is no reason why the capital gains from stock exchanges should be cosseted with a soft 10 percent tax that too after sparing the first Rs 1 lakh secularly for everyone. Wealth tax at the rate of 3 percent on net wealth in excess of Rs 3 crore would yields tremendous revenues for the central government especially if the tax does not discriminate between productive and non-productive assets. This was the vice in the 1992 Act suffered from before it was abolished in the manner of throwing the baby with the bathwater. A stiff estate duty at the rate of say 30 percent on large estates say in excess of Rs 5 crore too would yield good revenue.

While dole economics is bad, yet the government has to operate on merit-based subsidy and free schemes. Ayushman Bharat is a classic example of government spending for a good cause. The scheme is targeted at poor, deprived rural families and identifies occupational category of urban workers' families. So, if we were to go by the Socio-Economic Caste Census (SECC) 2011 data, 8.03 crore families in rural and 2.33 crore in urban areas will be entitled to be covered under these schemes, i.e. it will cover around 50 crore people. It should cater to more and more people because health is one area where people should not be condemned to fend for themselves.

It is about the economy. If it is fixed, social and filial tensions would also be fixed. Gainfully employed people don’t root for doles nor do they become handmaidens of divisive and anti-social forces.

(The author is a senior columnist and tweets @smurlidharan)

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Updated Date: May 20, 2019 12:19:43 IST