The government has been apathetic in addressing the major weaknesses of the country's economy

- India still lags behind China in sectors including employment and agriculture

- Opinion - P. Chidambaram

- Growth rates were high in the initial years of liberalization and market oriented policies

- India's industries are competing to survive amid high interest rates and high tariffs

The main responsibility of the Reserve Bank of India (RBI) is to maintain price stability. However, RBI has also adopted the standard adopted by other central banks to achieve stable growth. The Reserve Bank is instrumental in determining the direction of growth of the economy. The current government has missed the duty of determining the direction of the country's economy and is only focused on achieving political objectives.

Whatever information is currently available suggests that the pace of growth in the global economy and in India will remain sluggish. An article in the RBI Bulletin of July 2023, referring to the global economy, said, "Global growth is slowing down, particularly in terms of production and investment. Supply chain innovation through strong industrial and trade policies is having a ripple effect on international trade. Once again the components of the world are torn apart."

The Sadar Bulletin highlights the progress and achievements of India's economy: improved infrastructure, digitization, solar power generation capacity, service exports, stock market boom, etc. are covered. Some of the claims made in all these contexts are true. The Sadar Bulletin also highlighted the decline in economic activity, high unemployment rate, increase in demand for work under MGNREGA, decline in goods exports, decline in revenue expenditure, rise in inflation, decline in tax collection and fight against inflation.

Every situation has a positive side. Despite the mixed picture, India's economic growth rate averaged 8.50 percent per annum in the five-year period 2004-2009, but 7.50 percent in the ten-year period 2004-2014. In contrast to this, the annual average growth rate in the nine-year period from 2014 to 2023 has reached 5.70 percent.

Why has the average growth rate declined? Growth rates were high in the initial years of liberalization and market-oriented policies. Economic incentives supported growth. During the global financial crisis and epidemic period, the benefits of unconventional monetary policies adopted by America and Europe shifted to developing countries like India. In normal times, fundamental weaknesses and measures to overcome them are addressed, so as to ensure high economic growth rates. In my view, the current government has ignored four major weaknesses of the country's economy: These weaknesses are:

Low labor participation rate and high unemployment: The working age population (15 and above) is 61 percent of India's total population, i.e. 84 crore people of working age. After 2036 it will decrease. The benefits of high population will be short lived. A concern is the Labor Participation Rate (LPR). In June 2023, it went down to less than 40 percent. (In China the figure is 67 percent). Female LPR is as low as 32.80 percent. Why are 60 percent (male and female) of working-age people and 67.20 percent of working-age women not working or seeking employment? If we combine the unemployment rate of 8.50 percent with the LPR, it will be seen how much human resources are being wasted in the country. If 60 percent of people are not employable, longevity and education have no meaning. The country's economy runs on two out of four wheels.

Quality of Education: The Annual Status of Education Report is a survey report on households across the country, covering issues including the educational outcomes of children in rural India. This report of 2022 covered most of the rural districts of the country. In this survey on education, it has been found that there is a wide variation in the state of education among the states of the country. Average years of schooling in the country is 7 to 8 years. If these are the educational outcomes of children at the school level, then how can we fulfill the employment and responsibilities that require skilling in our children?

Low Productivity in Agriculture: According to Economic Survey 2022-23, India's rice production is 2718-3521 kg per hectare while wheat yield is 3507 per hectare. While in China in 2022 this figure was 6500 kg and 5800 kg respectively. The government might be complacent due to India becoming an exporter of rice and wheat. Keeping in view the climate change going forward, migration to urban areas, urbanisation, water availability and increase in the cost of raw materials, it is necessary to increase the productivity per hectare if agriculture is to remain a profitable activity.

Inflation and interest rates: India's industries are competing to survive amid high inflation, high interest rates and high tariffs. Each of these needs to be reduced.

Have you ever heard the Prime Minister of the country or the concerned Ministers making any statement about these fundamental weaknesses? No never.

Do we want to see India as an economy with an economic growth rate of more than 7.50 percent, or do we want to boast that India is the fastest growing economy in the world, staying between 5-6 percent?