Economy & Development

The concept of Universal Basic Income is that each citizen will be provided a stipend by the government rather than subsidies in kind. This idea is becoming of pressing importance because India, as a developing nation, is bound to be influenced by global technological trends induced by automation in industries. A study by World Bank has estimated that automation is poised to eliminate 69% of all the jobs across the nation. Although the question of affordability is central to the debate of UBI, India is in a better position to afford UBI as noted by renowned economists and should seriously consider the introduction of UBI.

In our country, where expenditure for social sector is grossly inefficient and allocations for schemes do not reach beneficiaries, redirecting that wasted expenditure as well as corporate tax exemptions, there is strong potential to make UBI viable in our country. India must not miss the opportunity to introduce UBI, although restricting of public finances to introduce UBI shall require accommodating powerful interest groups.

Indian policymakers have failed to harness markets for the common good and tailor policies accordingly. Observing the growth story of China, which despite a similar economic profile like India in 1980s, has grown to an economy five times bigger by actively embracing markets.

Policymakers should formulate policies in a way that is not aimed at greater interference of the state in markets through regulation of prices, but rather focus on promoting efficiency in markets and allocation of subsidies for the underprivileged. Committing to regulate prices can have a populist appeal for politicians, but the same induces corruption by driving transactions underground and creates hindrance to investments and economic growth.

India’s manufacturing hurdles are its own creation. The existing issues of infrastructure, complex regulations, labour laws all contribute to disincentivizing entrepreneurship in our country.

Poor implementation of policy initiatives by government is another serious issue, despite the new 2011 national manufacturing policy with promising new avenues, there has been no ground level implementation. This can also be attributed to the hostile attitude of state authorities towards private sector. For manufacturing to contribute a bigger share in Indian economy, initiatives like ‘Make In India’ help in providing an entirely new ecosystem but existing laws need to be amended in our country to strengthen the manufacturing sector.

Odisha must continue its journey to improve the Gross State Domestic Product (GSDP) to catch up with national average. Better standards of governance are required for poverty reduction in Odisha and improvement of several socio-economic indices, as better governance is correlated to economic development and improvement of income patterns.

Political will and stability is essential for sustaining economic growth. There is a dire need for administrative reforms to emphasize outcome and accountability in governance in place of hierarchy and red-tapism.

Although much can be done for improvement of farming, it is unsustainable for the farming sector to provide livelihoods to most of Indian population who are engaged in farming as a profession. The Land Acquisition, Rehabilitation and Resettlement (Act) of 2013 deals in details with controversial issues of fair compensation, rehabilitation and consent land owners but the procedural requirement of minimum 50 months for clearance of infrastructure projects is likely to make projects unviable.

Provisions under the Act are against industrialization and post-industrialization per se, as India needs to create million plus jobs every month and India already has the potential to do so in the field of services. India policymakers must take steps to ensure compensation is front-ended in the case of a land acquisition, alongside pursuit for infrastructure development and job creation for public purposes.