Answer

Inflation and unemployment are critical economic challenges that directly impact poverty and social inequality. As of January 2025, India’s retail inflation stood at 4.31%, while the unemployment rate hovered around 6.7%, disproportionately affecting vulnerable populations.

Welfare Schemes for the Poor and Underprivileged

• Food Security Programs: Provide subsidized food grains to economically vulnerable populations.
  Eg: PMGKAY gave free ration to 80 crore people during COVID-19.
• Employment Guarantee Scheme: Offer wage-based rural employment for financial stability.
  Eg: MGNREGA ensured 100 days of work for rural households.
• Healthcare for Economically Weak: Ensure free medical treatment for underprivileged families.
  Eg: Ayushman Bharat covers hospital bills up to ₹5 lakh per family.
• Affordable Housing Initiative: Promote homeownership among low-income urban and rural groups.
  Eg: PMAY-Urban sanctioned 1.18 crore houses for urban poor by 2023.
• Financial Inclusion Measures: Expand banking access and enhance financial literacy efforts.
  Eg: PM Jan Dhan Yojana opened 50 crore new bank accounts in the last nine years.

Need for Deft Management of Inflation and Unemployment

• Inflation Erodes Purchasing Power: Increases cost of living for poor households.
  Eg: As of January 2025, CPI inflation eased to 4.31% from 5.22% in December, but essential goods remain costly, burdening low-income households.
• Job Losses Worsen Poverty: Rising unemployment leads to financial and social distress.
  Eg: During the COVID-19 lockdown, urban unemployment peaked at 20.9% (PLFS, April-June 2020).
• Fiscal burden: Higher inflation raises the fiscal burden, increasing subsidy costs.
  Eg: India’s fertilizer subsidy surged to ₹1.95 lakh crore in FY24, straining public finances.
• Skill mismatch: It persists as education lags industry needs. Urban youth unemployment stood at 17.3% in Q4 FY23, highlighting the need for skill-focused reforms. 

Measures to Tackle Inflation and Unemployment

• Strengthen Monetary Policies: Use RBI interventions to stabilize inflation rates.
  Eg: RBI raised the repo rate to 6.5% in 2023 to control inflation.
• Boost MSMEs and Startups: Promote small enterprises to generate employment.
  Eg: Mudra Yojana sanctioned ₹23 lakh crore loans to MSMEs.
• Enhance Skill Development: Align education with industry-driven vocational training.
  Eg: PMKVY provided vocational training to 1.4 crore youth.
• Promote Manufacturing Sector: Create industrial hubs for large-scale employment.
  Eg: PLI Schemes, worth ₹1.97 lakh crore, cover 14 critical sectors.
• Improve Agricultural Productivity: Stabilize food prices and create rural employment.
  Eg: PM Kisan Sampada Yojana improved food processing industries.

A resilient economy demands not just welfare schemes but also robust inflation control and sustainable employment generation. Strengthening skill development, MSMEs, and labor-intensive sectors, alongside monetary-fiscal synergy, can foster inclusive growth, ensuring long-term socio-economic upliftment.