A remarkable vaccination drive aided the Indian economy‘s recovery from pandemic restrictions with a labour force ready to return to jobs in cities once these were lifted. Labour markets have recovered with urban employment gaining through formalisation of the economy and rural jobs riding on strong growth in agriculture and resumption of migration to cities.
This will be augmented by declining inflation that has affected real wage growth. School enrolment and dropout rates have reversed Covid setbacks and higher education is undergoing rapid capacity addition. A new education policy aims to skill the labour force in emerging sectors that have an outsized impact on the economy’s potential to grow.
Social sector spending by the Centre and states is outpacing total general government expenditure and should lead to improving outcomes as bigger chunks of it are driven by technology, such as Aadhaar for welfare delivery. Poverty eradication has kept up its tempo as the size of the problem becomes more manageable.
The Indian economy’s medium term growth is predicated on demographics that require synchronised improvements in inclusion. This requires reforms of governance at the grassroots level, the Economic Survey recommends. The Centre and states would do well to heed it.
