Narendra Modi, honourable Prime Minister of India gave priority to demonetization which according to him and other people involved in this process is a step taken at a right time for so-called “betterment “of the people. According to me the Prime Minister, forgot that there is a list of problems which needs to be given priority over demonetization. Problems like agriculture, water, infrastructure, education, employment etc. which for sure needs priority over demonetization.
In order to increase the GDP of the nation the government should focus on the following sectors: –
- Agriculture
- Infrastructure
- Education
- Industry
- Efficient and non-corrupt government and government officials
These 6 sectors are interrelated to each other and focusing on these sectors the GDP will see a huge rise.
Agriculture
India being an agriculture country can’t stop farmers from committing suicides by various schemes to help each farmer. U.S.A. being a capitalist country gives 98% subsidies to its farmers. The Indian farmers face the problem from the time they start sowing seeds till the time their product is sold in the market. For instance, a farmer who produces wheat. For the seeds the farmer needs to buy seeds as the seeds available to him are costly, after that for fertilizers he needs money. When the crop is ready, he goes out to sell it in the market, but the middleman gives him less amount for his wheat and sells it to the market at a high price. From the start to end he needs money which he needs to borrow from people trading in unorganized financial sector which cost them high, thus for a farmer must face a lot of financial problem which provokes them to commit suicides.
Infrastructure
As per Oct’16 South Korea’s development in infrastructure sector was 25.7%, whereas India’s development was 11.66%. This is a monthly development data. If the government focuses on infrastructure it would benefit almost all the three sectors i.e. primary, secondary and tertiary.
Proper infrastructure increases productivity of labor, industries, agriculture etc.
For instance, a village which produces only sugarcane that village is now well connected to the sugar mill. This would help the canes to retrieve the sucrose content in it. This will benefit the sugar producers as they can produce more sugar, this will increase the supply of sugar in the market which will reduce the price of sugar. Thus, like the sugar industry all the other industries can benefit with proper infrastructure resulting in a reduction in the price of the final product.
Education
Country like Andorra with population of 79,218 (2013) World Bank has education rate of 100% and India with a population of 1.252 billion (2013) has an education rate of 74.04%. If the government focuses on the education like the government of Andorra, we would have an educated population which would work for the formal sectors instead of informal sectors.
Formal sectors earn more as compared to informal sectors which means more spending power thus more government revenue resulting in less government deficits and more spending for other productive. With a citizenship of majority literate, the government need not focus on various awareness programs like family planning or cleanliness drive. For instance, the government of the U.S.A. doesn’t undertake awareness programs like family planning or cleanliness drive because the citizens are educated, and they know the benefits and drawbacks of such programs. Education is important in the life of each person living in this planet. Focusing and spending on activities like demonetization, building statues the government should focus and spend on education. Currently, the government of India is promoting only primary education and the higher education is not promoted to that extent. Only primary education will have 0 impact on their education. No doubt the literacy rate increases but the quality doesn’t, this is what the government needs to understand. The primary education can’t give a job informal sector that’s why there is a growth in the informal sector. For a good quality higher education citizen must move from their hometown to another city which sometimes restricts them. The restrictions are due to various factors like money, family attachment and many more. Education enhances the productivity of the worker which in turn will be profitable for the firm which in turn will be beneficial to the government in power.
For instance, we consider 2 friends A and B, both live in the same village, A is the daughter of a landlord whereas B is the daughter of a farmer. They completed their primary education in their village and for secondary education, A went to nearby district and for higher education she went to a city. After few years A got a job as manager. B, after completing her primary education she started working at a construction site to earn her bread. Due to lack of monetary support, B couldn’t go for higher education. Today’s situation in India is like if you have money you can go for higher and better education and if you don’t have you can’t go for achieve it.
Efficient and non-corrupt government and government officials
To stop corruption the government should take some other steps like introducing RTI on Political parties’ funding, more protection to whistleblowers etc. Just by changing the notes the corruption wouldn’t stop but by effective implementation of laws and introducing new laws that would help. The government should focus on efficiency also and not just job security because at the end of the day efficiency counts and not job security. There should be working CCTV cameras which could be directly linked to a new wing which would keep a record of the government workers. Even the Demonetization plan is not efficiently planned because in 44 days there are like 60+ changes being announced. Per day 1 change is mandatory.
My Take
Since there are various challenges linked up, the government should have taken care of those instead of Demonetization. Demonetization has just created a big wall which has stopped almost all the business cycle except for online businesses. According to me, the government should have focused on these sectors instead of this plan. Efficiency should be the criteria for selecting people and not relations.
This article was written by me for The Economic Transcript, Mithibai Economic Forum, Mithibai College.