Paramount priorities

The long seven-phase voting process of the world’s largest democracy has just ended. The next government is expected to be formed within a fortnight. Notwithstanding Prime Minister Narendra Modi’s scary prediction that a major political earthquake is expected within the next six months beginning June 4, when the results of the Lok Sabha polls are announced, the concerned citizens want the next government to immediately take up a few programmes on top priority. This author’s brief interactions with a few economists, industry leaders, teachers, students and political analysts have helped to identify at least three areas where citizens seek urgent intervention by the next government. These are: rising unemployment, growing economic and regional disparities, and restoration of democratic institutions. This piece will try to address these issues in brief.

Rising unemployment

Unemployment rate in India has reached a historic high level. Even though since the 1990s, India has been witnessing a long phase of ‘jobless growth’, the job market drastically shrunk during the last one decade. Demonetisation in 2016, steep rate of GST and unplanned lockdown during the COVID pandemic have broken the backbone of the unorganised sector of the economy, which generates maximum number of jobs in India.

Latest data from India’s CMIE, as quoted by economist Kaushik Basu, shows India’s youth unemployment rate has reached an alarming level of 45.4 per cent, for the age group of 20-24 — among the highest in the world. It may be recalled that in March, as per the India Employment Report 2024, released by the International Labour Organisation (ILO) and the Institute of Human Development (IHD), India’s youth accounted for almost 83 per cent of the unemployed workforce, and the share of youngsters with secondary or higher education in the total unemployed youth almost doubled from 35.2 per cent in 2000 to 65.7 per cent in 2022. Additionally, the report also mentioned that the Labour Force Participation Rate (LFPR), Worker Population Ratio (WPR) and the Unemployment Rate (UR) showed a long-term deterioration between 2000 and 2018.

Another recent alarming development is the ‘silent layoff’ in the IT sector. According to data shared by All India IT & ITeS Employees' Union, around 20,000 techies lost their jobs in ‘silent’ layoffs in calendar year 2023.

One major issue relating to the rising unemployment among educated youths is the growing mismatch between the skills acquired by the students in universities and the skills demanded by industries. It is reported that the Staff Selection Commission, Multi-Tasking Staff Exam, conducted in May 2023 in Uttar Pradesh, received a mind-boggling 5.5 million applicants for group D positions such as peon, watchman, gardener, etc. Many applicants who had applied for these menial jobs had B-Tech, M-Tech, MBA, and MSc degrees. It is alarming to know that this year a staggering 38 per cent of the graduating class from the Indian Institutes of Technology (IITs) remained unplaced. According to a report by Money Control, less than 3 per cent of higher learning institutions in India offer courses in new-age skills.

Various studies also highlight that the quality of employment is another key issue which demands urgent intervention by the government. While the emerging GIG and platform sector presently engages around one and a half crore people, the working environment there has been pathetic. A recent study has revealed that nearly 83 per cent cab drivers reported working for more than 10 hours in a day, whereas 78 per cent delivery personnel worked for the same duration. Harsh work-related challenges faced by gig workers, across eight major cities in India, are taking a toll on their health, with an alarming 99.3 per cent of cab drivers and 98.5 per cent of delivery personnel experiencing anxiety, stress, and chronic pain due to their unscientific work culture, reported Millenniumpost. The next government, along with the creation of jobs, must focus on developing a ‘decent work’ environment, as advised by ILO, for its citizens. The rising trend of gig and platform-based work and potential human rights abuses—exacerbated by the advent of AI—necessitate offering regular, unconditional payments to such workers through Universal Basic Income (UBI) so as to make a shift from ‘unsustainable’ to ‘human rights’ economy.

Growing economic and regional disparities

The economic disparity between the rich and the poor has been widening in India for a long time but the gap has widened further during recent years—especially since the Covid-19 pandemic. A study titled, Income and Wealth Inequality in India, 1922-2023: The Rise of the Billionaire Raj, by Thomas Piketty (Paris School of Economics and World Inequality Lab), Lucas Chancel (Harvard Kennedy School and World Inequality Lab) and Nitin Kumar Bharti (New York University and World Inequality Lab), revealed that economic disparities in India have reached historical highs. According to them, inequality in India has skyrocketed since the early 2000s, with the income and wealth share of the top 1 per cent population rising to 22.6 per cent and 40.1 per cent, respectively, in 2022-23. The study also revealed that between 2014-15 and 2022-23, the rise of top-end inequality has been particularly pronounced in terms of wealth concentration, and India’s top 1 per cent income share is among the very highest in the world, higher than even South Africa, Brazil, and the US".

In another recent publication titled Proposals for a Wealth Tax Package to Tackle Extreme Inequalities in India, Piketty et al have proposed a comprehensive tax package on the ultra-wealthy to tackle the massive concentration at the very top of the wealth distribution chain and create valuable fiscal space for crucial social sector investments. They suggested the government to impose a 2 per cent tax on net wealth exceeding Rs 10 crore and a 33 per cent inheritance tax to deal with the problem of rising inequality in the country. However, the former RBI governor Raghuram Rajan has challenged the effectiveness of traditional redistributive tax measures, such as wealth and inheritance taxes, arguing that they can be easily circumvented by the wealthy. According to him, Instead of levelling down by attempting to tax the rich, he advocates for "levelling up" by creating more opportunities for small and medium enterprises (SMEs). Rajan also advocates building a strong competition commission to ensure there is no concentration in any industry.

Economists can endlessly debate on the effectiveness of their respective approaches to tackle the extreme inequalities in India, but it has to be tackled urgently. A huge fund is required to initiate the Universal Basic Income Scheme (UBI). UBI is essential to boost the consumption demand of the common citizens which, through multiplier effect, would increase the effective demand of the economy, eventually creating more jobs.

In addition to the growing income inequality among the citizens, another major issue is the rising disparity among different regions of the country. There is a plethora of studies on state-wise disparities in India and across nations. In a recent study (2023), using different indicators and dimensions, Kumari et al observed that in India, different states have the widest discrepancies among diverse socio-economic indices. According to them, the states of central and eastern India are underdeveloped, which corresponds to a wide variance in the overall position. Kerala, Mizoram, Goa, Sikkim, and Delhi performed under the top five categories. But Madhya Pradesh, Bihar, Uttar Pradesh, Rajasthan, and Arunachal Pradesh were the bottom five performers, accounting for 32.53 per cent of the area and housing 39.96 per cent of the total population who suffer greatly from poor access to social, environmental, and economic resources.

A cursory look at the figures in the table also reveals the wide disparity in the use of bank savings across various regions of India. Credit-deposit ratio of six different regions for the period 2004-2023 clearly indicates that in all the years, the western and southern regions have received substantially higher amounts of bank credits compared to other four regions. North-eastern, eastern and central regions have received very low credit, compared to the deposits made by them in the commercial banks. These disparities in the disbursement of credits against each region’s deposits have created a vast disparity among different regions of India. This needs to be corrected for a balanced regional development which is essential for national integration and inclusive growth of India.

Though the Constitution of India has divided all powers (legislative, executive and financial) between the Union and the state governments, at present, the balance of power between the Union and state governments is very much tilted in the favour of the Union government. This needs to be corrected urgently to prevent any possible political unrest in the peripheral states.

Restoration of democratic institutions

The central democratic institution of India is its parliament. In recent years, parliament’s role has been undermined by a government, writes Avinash Kumar and Puja Rani in The Wire. They substantiated their observation citing quite a few misdeeds by the ruling party. For example:

· In August 2023, under the guise of protecting the right to privacy, the parliament passed the Digital Personal Data Protection Bill by voice vote in both houses of parliament despite a walkout by opposition members over the prolonged violence in Manipur.

· The parliament sessions in 2023 resulted in the passage of 19 bills in both the Lok Sabha and the Rajya Sabha, by voice vote, pushing parliamentary deliberations to the backseat. 141 opposition MPs were suspended.

· The ruling BJP regime has also used the president’s power to promulgate ordinances to effectively bypass the parliament.

· In the first 30 years of parliament, for every 10 bills introduced, only one ordinance was promulgated. In the 16th Lok Sabha (2014-19), the number of ordinances for every 10 bills rose to 3.5.

· Eleven ordinances were passed during the COVID-19 pandemic, of which only five were remotely related to the pandemic, and two to the healthcare sector.

· Despite education being on the concurrent list of the Constitution, the regime pushed the National Education Policy 2020 without discussing it with the state governments.

· Four existing wage- and bonus-related acts were replaced by the Code on Wages 2019, which excludes employment guarantee programmes from the minimum wage provisions and sets a national floor wage lower than the existing minimum wage in several states.

· Three bills replacing the Indian Penal Code, the Code of Criminal Procedure and the Indian Evidence Act were passed when only 34 of 543 elected members participated in the discussion in the Lok Sabha, 25 of whom belonged to the BJP, and 40 members in the Rajya Sabha, of which 30 members belonged to the BJP.

In a post on X, the Parliamentary Party Leader of the TMC in Rajya Sabha, Derek O'Brien, alleged that the 17th Lok Sabha was the first time that no deputy speaker was appointed, and the prime minister did not answer a single question. Referring to data compiled by think-tank PRS Legislative Research, he revealed that the 17th Lok Sabha had 272 sittings altogether over its five year tenure from 2019-2024. The 16th Lok Sabha had 331 sittings, while the 15th and 14th Lok Sabha under the Manmohan Singh-led UPA government had 332 and 356 sittings, respectively. The 13th Lok Sabha, too, had 356 sittings.

In addition to discrediting the Parliament, the ruling political establishment has also discredited the judiciary and the Election Commission of India. The effect of such acts have lowered India’s ranks in all the major global ranking systems related to democracy and human rights, For example:

· India was ranked 93rd out of 180 countries on the Corruption perception Index, 2023;

· India ranked at 109th position among 165 countries on the Human Freedom Index, 2023. India's overall performance score declined by 9 per cent between 2015 to 2023;

· India ranks 159th out of 176 countries on the Press Freedom Index;

· India ranked 104, between Niger and Ivory Coast, on the Liberal Democracy Index Report. The V-Dem report terms India as “one of the worst autocratisers lately”, and in the “top ten autocratisers” in the world. It dropped to an ‘electoral autocracy’ in 2018 and stayed there in 2023, with worse scores.

Observation

The political leaders, analysts and academia across India should remember that there is no 'Central government' in the country. India, also known as Bharat, is a ‘Union of States'! The term ‘Central government’ is a misnomer. The concept of ‘centre’ automatically makes some states ‘peripheral’ and turns them into ‘internal colonies’ of the power centre.

India cannot afford to benchmark itself with Burma (Myanmar) or Pakistan's political system and end up in the graveyard of constitutional democracy. These two quasi theocratic Indian neighbours are on the verge of balkanisation.

The world is looking forward to a resurgent India—a sovereign, socialist, secular democratic republic with a parliamentary system of government, to create an example of a sustainable and democratic nation for others to follow.

Views expressed are personal