Unveiling his economic vision, prime minister Narendra Modi has justified the use of subsidies to take care of the poor. He is right. The deprived sections need such assistance. What is required is a well-targeted delivery system. There is a need to cut leakages, not the subsidies themselves. The target group should be clearly identified and the commodities delivered on a routine basis. The ultimate objective is to empower the poor and break the cycle of poverty. Only in this way can the war on poverty be won. Moreover, development has to result in jobs. Reforms, economic growth, progress – all are empty words if they do not translate into jobs.
Considering that the average unemployment rate between the 1980s and 2011 was nine per cent, there is obviously no room for complacency, especially because India has been experiencing what is known as jobless growth in recent years. According to the ILO, total employment grew by only 1.1 million from 2004-05 to 2009-10. One reason for jobless growth is the use of automation in industries where robots perform the work of men. It has been said, therefore, that if the foreigners investing in the “make in India” projects favour automation instead of employing locals, there will be no change in the overall employment scene.
Although there are arguments on both sides of the debate which pits technology against labour-intensive industries, it is a fine balancing act which has to be performed on the basis of expert advice. However, there have been some good signs in the years after 2009-10 when employment expanded by 13.9 million although mostly in the informal sector. At the same time, what is worrying is that many in the 18-25 age group are finding it difficult to get jobs despite being skilled. What is more, only 21.2 per cent in the 15-59 age group have a regular salaried job. What is clear is the need to continue subsidies in the matter of, among other things, food and fuel.