The NDA government came to power in the country on the back of some great ideas, but stumbled on the implementation front, and the country’s healthy average growth rate faces a risk of slowing down, albeit not immediately, noted economist Abhijit Banerjee said here on Tuesday.
That 20% of the country’s 25-year-old men and 70% of its women are not in the labour force and the country faces the lowest female labour force participation rate in the world is unusual for a developing country, Mr. Banerjee said.
“There is not really a lack of jobs, they are just not interested in the kind of jobs on offer. The female participation is consistently falling; even Pakistan is chasing us on this front, which is bit of a shock,” he said, explaining that the root of the problem is the quality of jobs and the vicious cycle of family firms.
Of jobs and growth
“The younger generation wants quality jobs which are not available, and they want respectable jobs so they join the family business, but they cannot contribute in growing it as they are not the right person for the job,” he said.
One of the things robustly true about growth is that it slows down, Mr. Banerjee said, citing the examples of Brazil, which was one of the fastest growing nations between 1961-1980, but stopped for 20 years thereafter. “Japan was everyone’s ideal (and America’s nightmare) until the early 1990s, but it (growth) has stopped, more or less, forever. The possibility is high for India, but not currently,” the professor of economics at Massachusetts Institute of Technology said, stressing that India’s average growth rate of 7% is healthier than most countries.
India’s growth is higher than Nepal, Bangladesh (except last year) as well as China, he pointed out, before underlining that ‘comparison with China is a bit inappropriate’ as that country was growing at 12% when it had the same per capita income as India.
Among the factors that stop India from growing consistently is that government schemes do not see proper implementation, he said while delivering the seventh C.K. Prahalad Memorial Lecture on the theme ‘Can India keep growing?’, organised by the Confederation of Indian Industry. “Every now and then, Prime Ministers dream about announcing a scheme, they announce and stop there. The current government came in power with some great ideas, but there was no homework behind those and also no implementation,” he said.
Forbes Marshal co-chairman Dr. Naushad Forbes, who was in conversation with Mr. Banerjee, said governments should work on the details behind the policies by drawing in the best talents and better management. Quoting Oscar Wilde, Dr. Forbes said, “Losing one parent is a misfortune but to lose both is carelessness … and I think our government seems to be quite callous in retaining great economists.”
Mr. Banerjee said high government salaries also impacted productivity as “people spend their lives taking examinations to get government jobs that pay well.” “They would sit unemployed and prepare for the exams with someone else paying for them,” the economist said.
Wasting human capital
Though India’s demographic dividend of a large working age population is considered its biggest resource, the economist said the country is not investing adequately in its human capital.
The quality of education and healthcare in India has fallen, he said. While primary education standards have slipped after the enactment of the Right to Education Act in 2009, the state of secondary education is no better.
“Our performance in The Programme for International Student Assessment (PISA) was so poor that we refused to participate in it. For the government of India, the quality of education pertains to the 2009 assessment by PISA, which was only conducted for two States. Also, none of the top 100 educational institutions are in India,” Mr. Banerjee said.
Similarly, healthcare is not particularly encouraging in the country, he said. “In the private sector, only 4% have the MBBS degree, then we have a degree called BUMS — Bachelor of Unani Medical Science. There are large-scale studies where physically fit are sent as patients to them for testing and 70% of the times, they get it completely wrong, like diagnosing heart attacks with asthma,” he said.