In the latest episode of the “State of the Economy Podcast”, Nivedita V discusses India’s recent economic performance and its impact on job creation with renowned economist Ashoka Mody. Mody is Charles and Marie Robertson Visiting Professor in International Economic Policy at the Princeton School of Public and International Affairs at Princeton University. He is also the author of India is Broken: A People Betrayed, 1947 to Today.
India’s GDP grew by 7.8 per cent in the April-June quarter of FY23-24, and around 415 million people were lifted out of poverty in just 15 years. However, the challenge remains in generating sufficient jobs. Mody identifies historical factors contributing to India’s job creation issues, tracing back to Jawaharlal Nehru’s heavy industrialization strategy, which didn’t create many jobs. Meanwhile, East Asian nations excelled in labour-intensive industries like textiles and electronics. India’s lack of investment in human capital, especially education and female workforce participation, hindered its progress.
Mody emphasises the importance of mass education, good nutrition, and health in creating a skilled workforce. He criticises the focus on digital infrastructure, highlighting the necessity of human-to-human interaction in education. He calls for a system that generates quality teachers and gives them the respect they deserve, similar to Finland’s approach.
Regarding labour-intensive sectors, Mody opposes sector selection and advises creating conditions that will encourage manufacturing. He argues for a cheaper rupee to boost exports, citing the success of East Asian economies in making their currencies attractive to international buyers.
Mody addresses the issue of women’s low workforce participation, attributing it to violence in urban areas and the mechanisation of agriculture. He stresses the need for a safer environment and the importance of changing social norms.
In conclusion, India’s economic growth is promising, but job creation and education quality remain significant challenges. Addressing these issues requires a focus on mass education, quality teachers, and conditions for labor-intensive manufacturing, along with creating a safer environment for women in the workforce.
(Host: V Nivedita; Producer: Jayapriyanka J)
About the State of the Economy podcast
India’s economy has been hailed as a bright spot amid the general gloom that seems to have enveloped the rest of the world. But several sectors continue to stutter even as others seem set to fire on all cylinders. To help you make sense of the bundle of contradictions that the country is, businessline brings you podcasts with experts ranging from finance and marketing to technology and start-ups.