Third time is the Charm, stress should be on reforms

Third time is the Charm, stress should be on reforms

The mandate reaffirms the faith of voters. Therefore, the process of reforms must continue.

The year 2024 will be a historic year with Prime Minister Modi getting reelected to a third term in office. The sheer magnitude of this achievement can be gauged by the fact that PM Modi enjoys popular support even after a decade of governance. Additionally, the 2024 election marked the sixth consecutive election victory for Modi from the first time he sought a mandate in Gujarat.

The mandate reaffirms the faith of voters. Therefore, the process of reforms must continue. Among these would be the option of revisiting the Mahatma Gandhi Rural Employment Guarantee Program (MNREGA) that provides guaranteed employment in rural areas. A comprehensive unemployment insurance programme instead would work better that provides some form of income support to those who are struggling to find a job. In the Indian context, an appropriate unemployment insurance programme would be one that provides wage subsidies to firms in exchange for them absorbing a part of the unemployed workforce. This would take the form of providing a quarterly payment to the employer to hire a worker for an entire year. The programme can cover wages for up to 100 days of employment.

Such a programme would reduce the burden of the government on providing employment under MNREGA and at the same time provide a wage subsidy to firms which would assist in covering part of the relatively lower productivity of workers. To ensure that the policy is not misused, the programme could be extended only to MSMEs with an active EPFO number. In addition, any firm that fires more than half of the workers hired as part of the programme in the immediate next year could be made ineligible for benefits. Doing so would allow firms and unemployed workers to match, particularly those workers who can’t find jobs due to a higher reservation wage than what the market is willing to pay as the balance would be borne by the state.

Another key area would be health and nutrition. India’s food security act was ill-advised as it imposed a carbohydrate-intensive diet on Indians. In addition, even as the then UPA government claimed roughly 11 per cent poverty, the programme was extended to two-thirds of the rural population and half of the urban population. This mandate provides a renewed opportunity to revisit whether the idea of providing free carbohydrates is consistent with the nutritional and other development objectives of the Indian economy.

A more balance diet that is targeted to those who genuinely need them would be better. PM Modi in his first term had initiated an opt-out programme “Give It Up!” and perhaps the same should be launched for the National Food Security Act, 2013, under which, certain households who are at present considered to be eligible can chose to opt out. Once a critical mass of households decide to opt-out, the government can re-examine how to calibrate India’s existing food security to a more modern income and nutritional support programme.

A third area that requires attention would be the skills mismatch. The idea of a skill-census, while appealing, is difficult and expensive. However, it should be possible to let greater industry participation in designing and development of vocational courses that could be integrated as for-credit courses in existing curriculum. Such vocational courses can combine the benefits of modern skill-training with traditional formal education thereby providing students with the best of both.

The fourth area of reforms would be education, primarily that of school education. India’s school education system, along with its curriculum does not align well with the aspirations of modern India and nor does it serve India’s economy. Several life-skills and critical reasoning skills that should be developed during formative years are often ignored. Recent studies have shown that large language models and AI are exceptionally well in reproduction of knowledge but extremely poor in critical reasoning. It is therefore desired that schools focus more on critical reasoning.

Furthermore, there is a need to train India’s future citizens with the important life-skills of how to absorb information. Students these days are bombarded with information from different sources, however, they may not be well equipped to recognise the credibility of different sources and how to form an informed opinion. Other important skills such as the ability to do their own taxes, importance of savings, financial accounting and some preliminary knowledge about healthy financial habits are crucial. Prudent citizenry is the best line of check against fiscally irresponsible policies and unfulfillable promises of revadi.

A third mandate under Modi brings with it a promise of meaningful reforms. In addition, a coalition government could provide enough political capital for deeper administrative reforms. As they say, third time is the charm, and perhaps, the new mandate brings with it the promise of a more constructive Opposition.

Sumeet Bhasin

Director, Public Policy Research Centre

Posts on X: @sumeetbhasin

The New Indian Express