[Model Answer QP2022 GS2]Besides the welfare schemes, India needs deft management of Inflation and unemployment to serve the poor and the underprivileged sections of the society. Discuss
The government has taken several welfare measures recently such as Ayushman Bharath, Pradhan Mantri Garib Kalyan yojana, Pradhan Mantri Kisan Samman Nidhi, Pradhan Mantri Awas Yojana, Jan Dhan Yojana and Mudra yojana. These measures are taken to protect all sections of the population and all sectors of the economy.
However The Centre for Monitoring Indian Economy, a private organization, estimates that India’s unemployment rate will be 6.50% in September 2022. It is 7.70% in urban India whereas only 6.00% in rural India. This increases the vulnerability of the poor and underprivileged.
Furthermore ,the prices of essential food items have increased by 50% in seven years, whereas the real wage rate has risen by 22%. These figures show that inflation has outsmarted the real income of the poor, making their lives miserable as the food basket constitutes a substantial proportion of the total expenditure on the poor. The net effect is that the poor earn less and take loans to maintain the minimum standard of living.
Hence deft management of Inflation and unemployment is crucial to protect the poor and the underprivileged.
Ways to manage inflation to protect the poor and underprivileged
Governments can use wage and price controls to fight inflation especially on essential products.
Governments may pursue a contractionary monetary policy, reducing the money supply within an economy.
Targeting beneficiaries with minimal exclusion errors vis a vis National Food Security act.
Ways to manage unemployment to protect the poor and the underprivileged
Urban Employment Guarantee schemes are the need of the hour. Indira Gandhi Shahri Rozgar Guarantee Yojana in Rajasthan or Mukhya Mantri Shahri Ajeevika Guarantee Yojna in Himachal Pradesh.
Improving Skill programs in Rural and Urban Areas.
Improving placements in Pradhan Mantri Kaushal Vikas Yojana.
Improving Credit disbursal of Mudra funds. Improving last mile connectivity by using banking correspondents.
Unemployment allowance to the poor (on the lines of Universal Basic Income).
Improve female labour force participation.
Focus on increasing jobs in Manufacturing and labour intensive sectors to negate the effects of Jobless growth.
Conclusion
As per the OPHI (Oxford Poverty and Human Development Initiative) and UNDP Global Multidimensional Poverty Index 2021, about 22.5 per cent of the Indians are extremely poor and they struggle for survival with less than $2 per day. Hence any welfare schemes, management of Inflation or Employment programs should always make sure its impact is felt on this section of population in India.
