A Vision of Ram Rajya and the Contradictions of Progress

As Prime Minister Narendra Modi participates in the pran pratishta at the Ram temple in Ayodhya, invoking the vision of Ram Rajya characterised by communal harmony, women's safety, and poverty eradication, recent data from the NITI Aayog suggests a significant milestone. The report estimates that 248.2 million Indians have been lifted out of poverty during the nine years of the Modi government, as measured by the National Multidimensional Poverty Index (NMPI).

NMPI: A Holistic Approach to Poverty Measurement?

Introduced by NITI Aayog, the National Multidimensional Poverty Index (NMPI) redefines poverty assessment in India by incorporating 12 indicators across three dimensions: health, education, and standard of living. Unlike traditional income-based estimates, NMPI includes maternal health and bank accounts, providing a comprehensive view of poverty. This multidimensional approach aligns with global commitments such as the Sustainable Development Goals (SDGs) and recognises the interconnected nature of poverty.

However, the introduction of NMPI has sparked debates about the sustainability of a development model that primarily focuses on enhancing access to public utilities without adequately addressing the quality of education and income levels. Critics argue that while NMPI captures the multifaceted aspects of poverty, attention to the fundamental issues of education quality and income levels remains crucial. 

As India envisions a developed nation by 2047, striking a balance between expanding access to public utilities and addressing the nuanced challenges of education and income becomes imperative for a comprehensive and sustainable poverty eradication strategy.

Education Quality and Income Levels: The Unanswered Questions

Despite commendable government investments contributing to the enhancement of living standards, questions persist regarding the overall effectiveness of these initiatives. The Pratham's Annual Status of Education Report (ASER) reveals alarming insights into the state of education in India, emphasising the prevalence of poor-quality education. 

According to ASER, a significant proportion of students in the country are unable to perform basic reading and arithmetic tasks at their grade level. In 2021, the report highlighted that over 50% of students in grade 5 could not read a grade 2-level text. 

This educational deficit raises concerns about the creation of a potentially large cohort of "educated unemployable youth." The government's push for increased enrollment and accessibility to educational institutions must be accompanied by a rigorous focus on improving educational outcomes to ensure that the youth are equipped with the necessary skills for employment in a competitive global landscape.

While financial inclusion efforts have led to a substantial increase in the number of individuals with bank accounts, the impact of this progress is tempered by persistently low incomes and minimal savings among the economically vulnerable. According to the World Bank's Global Findex Database, between 2014 and 2017, India made significant strides in financial inclusion, with the percentage of adults owning a bank account rising from 53% to 80%. However, the socio-economic impact of this financial inclusion initiative is hindered when low incomes and meager savings accompany the existence of bank accounts. 

The Economic Survey of India in 2022 reported that a large percentage of the Indian population, particularly in rural areas, faces challenges in generating sufficient income and accumulating savings. This underscores the need for a more comprehensive and holistic approach to development, where not only the accessibility but also the quality of education and the improvement of income levels are integral components of the nation's growth strategy.

The Challenge of Income Poverty: A Reality Check

While the NMPI has showcased notable progress, India continues to grapple with the harsh reality of extreme poverty on a global scale. According to the World Bank's estimates based on a stringent $2.15 per capita per day income threshold, a staggering 160 million individuals in India find themselves in the clutches of extreme poverty. This statistic underscores the dual nature of India's development landscape — the strides made in multidimensional poverty alleviation coexist with the persistent challenge of income poverty.

Digging deeper into the figures, the World Bank's data reveals that, as of the latest available estimates, approximately 20% of India's population still lives below the $2.15 per day poverty line. Despite the impressive strides made in multidimensional poverty reduction, addressing the income poverty component becomes imperative to achieve the vision of a true Ram Rajya. It emphasizes the critical need for a comprehensive development strategy that not only elevates individuals out of multidimensional poverty, as measured by NMPI standards but concurrently ensures a substantial increase in income levels, offering a more robust and sustainable pathway towards inclusive prosperity

Employment in Rural India: A Tale of Two Regimes

A critical aspect of poverty alleviation is examining the employment scenario, particularly in rural areas where a significant portion of the population resides. Analyzing the trends over the past two government regimes, our research reveals distinct patterns.

UPA Era: Mixed Growth in Wages

During UPA-1 (2004-05 to 2008-09), real agricultural wages for men grew at a meagre 0.2 per cent per annum, while real rural non-agricultural wages declined at 0.9 per cent per annum. 

UPA-2 (2009-10 to 2013-14) witnessed a spectacular growth phase, with real agricultural and non-agricultural rural wages surging at 8.6 per cent and 6.9 per cent per annum, respectively.

NDA-1 and NDA-2: Deceleration and Negative Growth

The NDA-1 period (2014-15 to 2018-19) saw a deceleration in the growth of real farm and non-farm wages in rural areas to 3.3 per cent and 3 per cent per annum. 

The last five years of NDA-2 (2019-20 to 2023-24) presented a concerning trend, witnessing negative growth rates of -0.6 per cent for agricultural and -1.4 per cent for non-agricultural real rural wages, possibly influenced by the COVID-19 pandemic's impact.

Occupational Dynamics: Rural Labour and Changing Trends

An in-depth analysis of the occupational landscape underscores the critical role of rural livelihoods in the lives of those grappling with extreme poverty. Amid this demographic, a noteworthy trend emerges – the share of the workforce involved in agriculture, which had been steadily declining, witnessed a reversal in 2019-20 and 2020-21. This abrupt shift is attributed to the phenomenon of reverse migration spurred by the COVID-19 pandemic, compelling individuals to return to their rural roots. 

This reversal in the occupational composition may serve as a pivotal factor influencing the negative growth observed in both farm and non-farm rural real wages during the last five years of NDA-2. The impact of reverse migration on the labour market dynamics becomes evident, with an augmented workforce in agriculture potentially exerting downward pressure on wage rates.

Unemployment Dilemma: Comparing ILO and PLFS Data

The enigma surrounding India's unemployment scenario deepens as conflicting data from the International Labour Organization (ILO) and the Periodic Labour Force Survey (PLFS) cast a shadow over the nation's labour landscape. According to ILO data, the average unemployment rate stood at 8.4 per cent during the tenure of the UPA government and marginally decreased to around 7.9 per cent during the Modi government's term. 

This seemingly marginal reduction raises questions about the nature and inclusivity of the economic growth witnessed under both administrations. However, a divergent narrative emerges from PLFS data, which indicates a consistently lower and declining trend in unemployment. Notably, by 2021-22, the PLFS data suggests a substantial drop to a 4.1 per cent unemployment rate, signalling a more optimistic outlook compared to the ILO's assessment.

The perplexing gap between ILO and PLFS data is attributed to differing definitions and methodologies employed in measuring unemployment. The disparity becomes more apparent when considering PLFS's potential inclusion of unpaid work as a form of employment, a criterion that diverges from international standards. The inclusion of such unpaid work may distort the unemployment figures, making them appear lower than reality.

Santosh Mehrotra, Economic Adviser and expert in labour market dynamics notes that this definitional distinction renders PLFS estimates non-comparable with international data, introducing a layer of complexity to the interpretation of India's employment landscape. As the nation grapples with this definitional dilemma, policymakers and researchers face the challenge of reconciling disparate datasets to construct a more accurate understanding of the unemployment situation and crafting targeted strategies for sustainable employment growth.

The Litmus Test for Employment and The Path to 2047

Despite the debate over unemployment statistics, the focus on real wage rates emerges as a crucial indicator. Government data reveals a concerning trend in rural areas during the last five years of the Modi-2 regime, where real wages have experienced negative growth. Urgent attention and further research are needed to devise an employment-intensive growth process.

As India charts its ambitious course towards a Viksit Bharat by 2047, the intricate web of challenges encompassing poverty, education quality, income levels, and employment dynamics demands more than just aspirations — it requires a transformative and nuanced approach. While the National Multidimensional Poverty Index (NMPI) signifies commendable progress in elevating millions out of multidimensional poverty, the shadows of inadequate education quality and persistent income poverty loom large. The oscillations in rural wages and the baffling unemployment scenario stand as stark reminders that the journey towards true Ram Rajya necessitates an unwavering commitment to addressing not only the quantity but, more critically, the quality of development.

As the nation witnesses the consecration at the Ram temple in Ayodhya, the occasion should serve as a moment of reflection on the true essence of Ram Rajya. Meticulous navigation through the paradoxes of progress requires a comprehensive strategy that transcends mere statistical achievements. It demands a prioritization of education quality, ensuring that access to schools translates into meaningful learning outcomes. 

There is an urgent need for policies that foster not just economic growth but equitable and inclusive development. The consecration at the Ram temple should not only symbolize religious fervour but also inspire a collective commitment to creating a society where every citizen thrives in a holistic sense. It's time to transcend rhetoric and embark on a pragmatic journey that aligns with the true spirit of Ram Rajya – an era marked by justice, prosperity, and the well-being of every individual.