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Turning the spotlight on unemployment crisis

The RSS is clear that the country can’t wait for foreign direct investment to come in and create jobs. ‘Make in India’ is a good idea of the Modi govt, “but it needs to be sharpened even more and get more investment.” The RSS resolution outlines a key solution — take agro-based local initiatives to promote rural areas and create jobs.

Turning the spotlight on unemployment crisis

Viewpoint: The Covid pandemic has aggravated unemployment. Tribune photo



Subir Roy

Senior economic analyst

The foremost goals of the government’s economic policy have been to maintain fiscal balance, thereby keeping a tight rein on inflation, and investment in infrastructure. The logic is that if the economy is held on to a steady course, future robust growth will be assured by the wherewithal and momentum created by a growing infrastructure.

No one expects FDI to be a large-scale creator of jobs but it helps build hard currency reserves, giving decision-makers freedom to access what is considered useful across the world.

The contending view lays foremost store by protecting here and now the income of those at the bottom of the pyramid, rendered jobless by the Covid-induced economic slowdown, so that widespread destitution is kept at bay. The way to ensure this is through direct benefit transfer plus assistance to micro, small and medium enterprises (MSMEs) so that they can keep their doors open and their workers continue to earn a living. The resources for this can be accessed, if need be, by printing money. The process will be non-inflationary as the resources passed onto businesses will keep them running and thus prevent supply chain disruption. The benefits transferred will take up a part of the substantial food stocks with the government (already paid for) and create demand, particularly in the countryside, for FMCG (fast-moving consumer goods) companies.

The opposition viewpoint has just been endorsed by none other than the ideological mentor of the government, the RSS. According to a spokesman, the burden of the discussion that led to a resolution being passed by the Akhil Bharatiya Pratinidhi Sabha, the highest decision-making body of the RSS, was that “the young generation is suffering from unemployment and the pandemic has made things even grim... We cannot turn a blind eye to unemployment. It is a crisis and it needs to be addressed.”

The RSS is clear that the country cannot wait for foreign direct investment to come in and create jobs. ‘Make in India’ is a good idea of the Modi government “but it needs to be sharpened even more and get more investment.” The resolution is titled, ‘The need to promote work opportunities to make Bharat self-reliant’. The resolution outlines a key solution — take agro-based local initiatives to promote rural areas and create jobs, according to Ram Madhav, a member of the RSS executive committee.

He adds that RSS affiliate Swadeshi Jagran Manch has been doing this for a long time and we need more enterprising individuals. Now, the manch is one of the lesser affiliates of the RSS and

its total focus on things national sets it apart from government think tanks like Niti Aayog and the Prime Minister’s Economic Advisory Council, which do not want the country to shut itself up from everything foreign but pick up ideas and agendas on merit. The manch has been at the periphery of the BJP’s public policy thought process and in fact ignored up to a point, treated as a minor voice harping on its own on the sidelines.

As far as foreign direct investment is concerned, no one expects it to be a large-scale creator of jobs. It is a source of funds and sometimes technology which comes with it. It helps build the country’s hard currency reserves which give the decision-makers freedom to access what is considered useful across the world.

While there will be few takers for the manch’s one-point domestic agenda, the issue of jobs is another matter. Here, we come back to the basic difference between the ruling and contending viewpoints. The government does not put the loss of jobs and resultant deprivation right at the top of its concerns. There are schemes for direct benefit transfer to the poor and loans for smaller businesses but not at the cost of taking a calculated risk with fiscal stability and prices.

If economics and economic policy ultimately boil down to a matter of choice, then the alternative choices have to be framed clearly and precisely. Noted economist Lionel Robbins, almost a century ago, compressed the core concern of economics to a single assertion —“the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses.”

If the Government of India had only one rupee to spend, where would that go today? To fund a power plant or a railway line on the one hand or to a small business which can thereby operate and be a source of life-saving livelihood to its handful of employees? The government, currently concerned about losing its control on prices, would spend the rupee on the railway line or the power plant as that would create a tangible asset which would in turn create a stream of income over decades or more. On the other hand, the small business could go bankrupt and close down, thus failing to play its role in the supply chain and failing to be a source of livelihood to its handful of employees.

The contending viewpoint would hold that fighting destitution by ensuring that jobs do not disappear must be the primary concern. Particularly so because funding benefits and supporting small businesses would stimulate economic activity and in the ultimate analysis be non-inflationary.

In this debate, the RSS comes out on the side of the impoverished worker and considers ensuring employment for such people the foremost concern of the government. Ram Madhav has said, “We need to focus on MSMEs. This (RSS) resolution is not about government policies, but about cumulative efforts of all Indians to sail through the unemployment challenge fuelled by the Covid pandemic.”

It is significant that the views of the RSS have emerged from pre-election ground-level surveys in Uttar Pradesh which revealed annual migration from rural to semi-urban areas in search of jobs. Hence, the categorical assertion by the RSS functionary that unemployment is a crisis and it needs to be addressed.


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