The Issue Is Not About India’s GDP, But Its JDP

The Issue Is Not About India’s GDP, But Its JDP 19 Aug 2023

Context: 

The recent discourse among India’s political leaders primarily centers around GDP growth rates.

  • However, it’s crucial to question whether high GDP figures truly translate into economic prosperity for all.

Concerning Points:

According to an analysis based on data from the Reserve Bank of India (RBI):

  • In the 1980s, each percentage point of GDP growth in India created 200,000 formal jobs.
  • However, this figure halved to 100,000 jobs per percentage point of GDP growth in the 1990s.
  • This trend of declining job creation continued in subsequent decades.
  • Factors contributing to this decline: Poor quality of GDP growth, rapid productivity growth, and extensive automation.
  • Job Demand vs. GDP Growth: Despite India’s impressive GDP growth, there’s a concerning rise in the demand for minimum wage work under schemes like the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). 
    • India’s real GDP has grown 5.3% (annualised), but demand for MGNREGA work also grew at 5.4% every year.
    • This paradox suggests a disconnect between GDP growth and job creation.
  • Quality of Jobs and Social Divides: Approximately 75% of the formal service sector jobs resulting from GDP growth are held by individuals from higher castes. In contrast, 80% of MGNREGA workers belong to oppressed castes, including Dalits, tribals, and backward castes.
  • Semiconductor Manufacturing Hype: Focus on job creation rather than chasing high GDP growth. For instance, India’s semiconductor manufacturing venture, while strategically important, offers limited job prospects due to automation. 
    • Traditional industries like automobile, steel, and cement also create fewer low-skilled jobs due to automation, despite contributing to GDP. 

India’s New Mines and Minerals Bill – A Potential Economic Boost:

  • India’s new Mines and Minerals (Development and Regulation) Amendment Bill, 2023 (MMA Bill), if well-implemented, can significantly benefit India’s economy.
  • Key to Electric Mobility Transition: Minerals like lithium, cobalt, and rare earths are crucial for electric mobility.
    • China’s dominance in this supply chain poses challenges due to its aggressive geo-economic strategies.
  • Untapped Mineral Potential: India’s topography offers similar mineral deposits as Afghanistan and Western Australia.
    • However, India has explored only a fraction of its mineral potential.
    • India’s exploration of untapped mining potential offers a path to inclusive economic development and strategic global influence, but careful evaluation is crucial.
  • The MMA Bill’s Potential: It seeks to involve the private sector in exploring strategic minerals, including lithium.
    • Mining can generate local, low-skilled jobs and promote social inclusivity, benefiting marginalized castes.

Conclusion

  • While GDP growth remains a convenient measure for economists, political leaders must ensure that economic growth translates into tangible benefits for the people. 
  • Shifting the narrative from GDP to JDP (Jobs Data Product) can lead to more inclusive and socially beneficial economic development.

News Source: The Hindu 

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Comprehensive coverage with a concise format
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