Striking a Balance: How India’s New Government Can Manage Economic Expansion and Social Welfare in an Evolving Landscape

WITH THE DIN and dust of the Lok Sabha elections over and the new government set to get going in the next few days, it is time for everyone to calm down. The bitterness generated during the hectic election campaign spread over a record month and a half must now give way to mutually respectful and positive feelings, and everyone should get on with the task of nation-building.

Hopefully, the Hindu-Muslim card, which dominated and vitiated the election campaign, would be buried forever, and we work towards a Viksit Bharat. The government as well as the opposition now must walk hand in hand with due respect and regard for one another.

It is important for the new government to start on a positive note and not indulge in witch-hunting or take out political vendetta to “settle scores” for allegations leveled or harsh words uttered during the heat of electioneering.

The stakes were very high, and therefore the leaders overstepped and leveled charges against each other, most often without verifying the facts or distorting the words of their political rivals.

The new government has the task cut out for itself. While the nation has made several strides, particularly in the areas of infrastructure and connectivity, it still grapples with some very serious problems.

The GDP recorded an impressive 8.2 per cent despite the poor performance of agriculture, which grew at 1.4 per cent, well below the decadal average of 4.4 per cent.

However, the real challenge for the new regime would be to sustain the level of growth by taking measures based on the advice of experts. The government must ensure that the fruits of economic growth are widely spread.

But one of the biggest challenges for the government is to generate jobs and encourage the youth to go for entrepreneurship. According to the latest report of the Centre for Monitoring the Indian Economy (CMIE), the unemployment rate in India rose to 8.1 per cent in April 2024 from 7.4 per cent in March 2024.

The unemployment rate increased sharply both in urban India as well as in rural India. The unemployment stress in rural areas is reflected in the huge demand for MANREGA jobs.

Former Chief Economic Advisor to the Government of India Kaushik Basu has said that the CMIE data “shows that the youth unemployment rate has reached the alarming level of 45.4 per cent—among the highest in the world. This is doing deep damage. For the sake of the country, we must not hide behind slogans, put politics aside, and take corrective measures”.

However, some experts have pointed out that this figure of 45.4 per cent pertained to youth in the age group of 20 to 24 years. But the fact remains that unemployment has actually increased over the last 10 years, with almost no new jobs being created. The youth are getting restive, and there is an upsurge in crimes like snatching, robbery, and theft.

The new government must concentrate on encouraging medium and small enterprises which provide over 10 million jobs and had suffered a huge setback due to demonetization, introduction of GST, and finally the COVID pandemic. It must come out with incentives and liberal loans to encourage the setting up of small businesses.

The other area for major concern is the agriculture sector. The country’s agriculture production growth was down to 1.4 per cent in 2023-24, down from 4.7 per cent in the year before.

This needs serious thought, and efforts must be made to modernize agriculture and encourage exports of vegetables, cereals, and fruits.

Climate change and shortage of electricity are other areas that need positive government policies. The current heatwave and the sharp increase in the demand for electricity are pointers to the needs of the future. The steps should include water conservation, planting of trees in millions, and increasing sources of clean energy, including solar energy.

Last but not least, the government must focus on improving standards of education, both at the level of schools and higher education, and health services, particularly in the rural areas. The nation is looking up to the new government to carry on the unfinished tasks, and the world is watching India’s growth story unfold.

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