Underestimation, Complacency & Denial
It is self-evident in the Market System that if the economy slows down, people will start losing their jobs. India is no exception to this. In its latest report, the Centre for Monitoring Indian Economy (CMIE) has mentioned that sources of earning of more than 7.5 million Indians got depleted in April (2021) alone, and about half of them were salaried employees. According to the report, the impact of unemployment has been felt most in the rural areas. The COVID-19 Pandemic has rocked small and medium industries in different parts of India. Employment opportunities have dropped sharply in these sectors… even self-employed persons are without activities, too! People have become jobless in urban areas, as well! The situation has remained the same in May, although the official data of the current month is yet to be published. The outbreak of the Pandemic ruined the Indian Economy in 2020. The scale of the catastrophe is no less this year, as people experience the same in 2021. Calling it unfortunate would be wrong, because the Government of India is responsible for this situation. The Government did not learn a lesson from the sufferings in 2020.
The CMIE data have also shown that the unemployment rate peaked at 27.1% in the first week of May. The total employment in the country dropped from 403.9 million in 2019 to 393.6 million by November-December 2020. India’s real Gross Domestic Product (GDP) at current prices stood at INR 195.86 lakh crore (or USD 2.71 trillion) in Financial Year 2020-21, as per the Second Advance Estimates (SAE) for 2020-21. With relatively high growth rates (of between 4% and 8%) and its large size, it has a significant impact on the world economy. Even before the Pandemic took hold in early 2020, the International Monetary Fund (IMF) had cited India’s indifferent output as the main reason for sluggish world growth figures in 2018 and 2019. Moody’s recently revised India’s 2020 GDP forecast to -8.9% from -9.6%, raising the 2021 forecast to 8.6% from 8.1%.
The first step of solving any problem is to acknowledge that there is a problem. However, Prime Minister Narendra Modi and his Cabinet colleagues have been reluctant to acknowledge the same! Had they acknowledged the problem, they would also have had to tacitly admit that they failed to tackle the situation! In fact, there are two aspects of their failure: In 2020, Indian and foreign experts advised the Modi Government to transfer cash directly to the people. However, the Modi Administration made bank loans more readily available. Most probably, the Government did not feel like appreciating the suggestion, as it was not ready to pay money to the common people unnecessarily! Hence, there was a lack of demand in the market. The lack of demand had hit the Indian Economy even before the outbreak of COVID-19 Pandemic. Later, it, in a way, completely crippled the Economy.
Countries around the world had taken different steps in 2020 in order to protect the employees from the turmoil in market. Many Governments started paying the lion’s share of the workers’ salaries so that they would not be laid off. During that period of time, the Government of India reformed the Labour Law, abolishing the workers’ basic rights!
It is important to understand one thing clearly. There is a root cause of virtually all of the issues India is currently facing, and it is that the Government, possibly, does not like to have an idea about the duty of the State towards its people. Furthermore, the Government is unable to think beyond the short-term gain. Hence, it has become imperative for the people to remind the State of its duties. The Primary Duty at this moment is to lighten the burden of the Common People. The Government should consider Unemployment Benefits for jobless people. It is also important to increase the expenditure in the National Rural Employment Guarantee Act, 2005, apart from providing those, who are incapable of manual labour, with different ways of financial assistance. There are various possibilities of what could be done. However, the Government would have to break the boundaries of its myopia for that.
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