At a time when doomsday predictions of India’s economy are a dime a dozen, the OECD has given a thumbs up to India’s reform efforts of the recent past, suggesting that the sliding GDP growth would be arrested in 2020, though only just. In its country report for 2019, the group representing the developed world prescribes largescale reforms as the only solution for reverting to a high growth path.
Releasing the OECD Economic Survey of India 2019 in New Delhi, its Chief Economic Laurence Boone said, ““India is now well established as a growth champion and a major player in the global economy. However, this slower pace of growth underlines the need to fully implement existing reforms and continue lowering barriers to trade to generate the investment and jobs India needs to raise living standards across the country.”
The report predicts that India’s GDP would grow at 6.2 per cent and 6.4 per cent respectively during 2020-21 and 2021-22, which would be music to the ears of Finance Minister Nirmala Sitharaman, who has been facing the brunt of criticism for her lacklustre efforts to drive up the economy which has floundered despite corporate rate cuts for the industry being notified. The general refrain has been that the government has reduced corporate taxes without increasing cash in the hands of the people who can spend it and give the economy a boost.
Though the survey ignores specifics, it says that India needs to take initiatives to address social challenges such as creating high-quality jobs while improving public services and welfare. While inflation has been under control, the latest uproar over spiralling onion prices have once again brought tears to the eyes of the common man.
Some of the areas that the OECD report on India’s economic performance has highlighted include the following:
- Quality Jobs: The declining rate of employment is a major lowlight with the situation being worse for women. If they have jobs, it is more likely to be underpaid. The solution lies in simplifying the existing complex labour laws. Some of them dampen hiring as industrial firms grow. The report says that in a fast growing economy with well-educated young population, lack of formal employment and its benefits cuts deeply.
- Social welfare: While India has made some improvements in access to electricity, drinking water and rural roads, the state of basic amenities continues to remain poor. 100 million toilets have been built since October 2014, programs to reduce female infanticides and educate girls have been introduced, new income support scheme for farmers is being deliberated, however, public resources invested in health and education are low. The government needs to train more doctors, nurses and teachers in order to raise the wellbeing and productivity.
- Housing and urbanisation: While the government has taken initiatives to improve the state of housing in the country, the output hasn’t been great. The housing shortages continue to grow, especially in the rural areas. Further urbanisation is going to worsen the situation. The problems do not end here. The houses which are accessible, are not affordable for the extreme poor. The government is aiming to provide housing for all by 2022. However, the government needs to take smarter actions to battle the situation. Moving to rental housing scheme could prove to be more lucrative and helpful for the majority of young and low-income work force.
- Climate: Needless to say, this stands as one of the most important concerns which several nations are fighting with. Many Indian cities are unhealthy in terms of air quality and global warming has already started showing its impact. The government needs to lower down the pollution level and more towards alternate sources of energy.