The dangers of going growth first

After a slight blip following the demonetisation disruption, global agencies like the IMF and World Bank have reinstated India’s fastest emerging economy tag with growth pegged anywhere between 7.2 an

After a slight blip following the demonetisation disruption, global agencies like the IMF and World Bank have reinstated India’s fastest emerging economy tag with growth pegged anywhere between 7.2 and 7.7 per cent for this fiscal and the next. In another encouraging sign, the IMD and Skymet have projected a normal monsoon, which should bump up agricultural growth and keep food inflation in check. This should also calm down the central bank's nerves, which last month exercised extreme caution citing sticky inflation.

A high growth projection is heartening, but that’s dependent on a slew of factors. First in line is the protectionism tremors coming from the US, UK and Australia, which will hit the country’s jobs engine the hardest. Growth without job creation isn't of much use and actions are required to enhance domestic employment generation. Though we have a robust unorganised labour force, prospects for a good deal of India's corporates and organised workforce currently rest heavily on global cues. Thus a shift in policy is imperative to ensure that our job engine remains resilient irrespective of global headwinds. If not, the poor use of resources like labour and capital will lead to a weak economy, prevent the expansion of efficient firms and promote inefficient ones.

Lack of economic policies and absence of structural reforms will not only hurt growth, but also hit human resource productivity, our biggest asset. So instead of chasing the highest growth rate, efficient resource utilisation should be the key, as growth automatically follows. Perhaps, India should take a leaf out of British economist Kate Raworth's recent work Doughnut Economics, where she argues that instead of economies that need to grow, whether or not they make us thrive, we need economies that make us thrive, whether or not they grow. Money, markets, taxation and public investment should be designed to conserve and regenerate resources rather than squander them.

Related Stories

No stories found.
The New Indian Express
www.newindianexpress.com