According to financial data released by the National Statistical Office on February 26, there was a slight improvement in GDP, which rose 0.4% in the previous quarter, marking the end of the contraction that has been going on since last April. .
In the April to June 2020 quarter, GDP would have declined by 23.9% compared to the corresponding quarter of 2019. This contraction has now been revised downward to –24.4%. In the July-September quarter, GDP contracted 7.5% less than the corresponding quarter. Now, the latest government data shows growth of 0.4% in the quarter ended in December.
Although this compensates for the technical recession that appeared after two quarters of contraction, the situation remains dire. Overall, in fiscal year 2020-2021, our GDP is expected to decrease by 8% from the previous year.
During the three quarters of this fiscal year, the agricultural sector of the economy made a significant contribution. Its growth rate was recorded at 3, 3.4 and 3.9% respectively.
While manufacturing and construction in the industrial sector returned to positive growth in the third quarter, growth in this sector was seen in the case of large units, while the situation for smaller units remained depressing.
In the service sector, finance, real estate, professional services, electricity, gas and water have returned to positive growth while trade, hotels, transport and communications – which can provide more jobs – remain in crisis.
There has been a slight increase in household spending over the holiday season, but the pandemic has left households strained in terms of jobs and income due to lack of government support.
At present, the growing number of victims of this pandemic (antibody studies show that more than a quarter of our population may have already been infected) seems to lead to economic desperation and negatively affect the rate of growth. economic.
The numbers are strong enough to make you think seriously. Even in such times, the rulers, sparing no effort to give false consolation to the people, deliberately use the services of pro-government and pro-business economists to weave a web of confusing statistics.
Claims to fill their stomachs were easy to refute. While these economists are well aware of the reality, they have fabricated data and conducted conclusions-oriented studies in the hopes of securing some small, insignificant favors for themselves. They are seen openly propagating these conclusion-oriented studies beyond their normal capacity.
Sometimes the concepts of economic growth and economic development are used interchangeably by some people, which is not fair. The rate of economic growth represents an increase or contraction of GDP, while economic development reflects the standard of living of the population.
The main determinants of economic development are the level of education of the population, the level of health services, including medical and preventive services and the level of service provided by them, the availability of housing and its state of readiness. , various aspects of ecology and the average age of people.
Positive economic growth can be important, but what is much more important is how it develops and why. If the rate of economic growth exceeds the rate of population growth, it can only be considered good if it reduces economic and other disparities between different sections of the population and improves the standard of living of the population.
In this regard, the interests of future generations must also be taken into account.
The performance of the agricultural, industrial and service sectors of the country’s economy during the first three quarters of the fiscal year shows that during this period, the economic growth rate of the agricultural sector has been excellent. The silver lining for the economy is the agricultural sector alone.
The Covid-19 pandemic has made it clear to the world that human beings can survive without cars, bunglows, planes, phones, etc., but our lifeline is agriculture.
Given this fact and the performance of various sectors of the economy since the pandemic and the lockdown, it is incumbent on the country’s leaders to protect the interests of the agricultural sector and its hard-working farmers, farm workers and rural artisans.
In fact, in 2020, the country’s leaders went in the opposite direction and enacted three farm laws. They claim and propagate that these laws will double the incomes of farmers and increase the welfare of consumers. But from the ongoing dialogue in this regard, it is clear that these laws run counter to the interests of farmers, farm workers, rural artisans and consumers. They also pose a threat to the country’s food security.
Aware of these facts, the peasant organizations had urged the government of the Union not to promulgate these laws. After the promulgation of the laws, the peasant organizations constantly fought for their repeal. This struggle was started by peasant organizations in Punjab, and other peasant organizations across the country have joined the fight. After the dialogue on agricultural laws, other sections of society joined in the struggle, and now it has become a mass struggle.
Although there have at times been strained relations between farmers and farm workers on certain issues, farm workers have joined the farmers’ struggle to the best of their ability with their broader interests in mind.
Considering the enormous contribution made by the agricultural sector to the economic growth of the country during the Covid-19 epidemic, it is the duty of the central government to provide all possible assistance to all sections dependent on the sector for their subsistence. Instead, it helps the business community take control of the agricultural sector through the three agricultural laws and its other policies.
With the full implementation of these laws, corporate farming will come into being. Corporate agriculture is intended to displace agriculture dependent farmers, farm laborers, rural artisans and other sections working in the sector. The serious consideration in this regard is where will the workers in these sections get a new job and social security after they move?
The potential for job creation in the industrial and service sectors is negligible and will continue to decline in the years to come. The pandemic has exposed the demands for social security benefits from workers in these two sectors.
Already about 50 percent of the country’s population, which depends on agriculture for their livelihood, receives only about 16 percent of national income.
Studies in Punjab and other parts of the country have found that almost all of the small farmers, farm laborers and marginal rural artisans are born into poverty and debt, live their hard lives in poverty and debt, and leave behind a mountain of debts and debts. abject poverty, they die a death of deprivation or when all hopes for their life are dashed, they commit suicide.
With the exception of large farmers, marginal, small, middle and middle farmers and farm workers are in so much debt that they are not even able to pay interest on loans. These sections have to take out loans even to maintain the stove for only two meals a day. The poorest are the agricultural workers and rural artisans because they have no other means of production than to sell their labor.
According to the 66th cycle of the National Sample Survey, 92.8% of the country’s workers were in informal employment in 2009-10. The proportion of workers employed informally has increased further over the past decade, as the ax is sharpened on the public sector.
Informal workers remain uncertain about their ability to find employment for the day ahead. Here it is very important to know a very sad fact about consumers in general: the NITI Ayog recommended a reduction in food subsidies to reduce the budget deficit. If this is done, the already poor condition of ordinary consumers will worsen.
To accelerate the economic growth of the country, the state must formulate and implement policies guaranteeing a minimum level of income for the classes dependent on agriculture and informal workers, so that they can earn a living to meet their needs. base in a respectful manner.
To do this, the economic development model favorable to the business world must be replaced by the economic development model respectful of people and nature. In this model, the tax rates of the rich will have to be increased and the collection of taxes assured. Public sector enterprises will need to be created and developed, while regularly monitoring and regulating private sector entities.
Dr Gian Singh is former professor, Department of Economics, Punjabi University, Patiala