Covid reminds us that national strength needs massive, non-farm, formal job creation
Ten rich countries got the first 80% of Covid vaccines, American expendable income per person is 27% higher than February 2020. The rich country company capital spending will soon be 20% higher than pre-pandemic.
We will need decades to strain out the noise and partiality in explaining which countries handled Covid better. Like small vs big, democracies vs autocracies, presidents vs prime ministers, men vs women leaders, urban vs rural.
The instinct that wealthy and powerful countries make the disaster less painful for their citizens is hardly original; poet Ramdhari Singh Dinkar wrote.
Covid reminds us that the only balanced solution for our healthcare, education, sanitation, and nutrition challenges is raising India’s per capita GDP.
Raising India’s wealth and power – our 148th country ranking in hospital beds per capita closely tracks our 142nd country ranking in per capita GDP. It needs recognising that economic development is what psychologist Robin Hogarth called a “wicked learning environment”.
Change began in 1991 when China and India had the same GDP per capita; the average Chinese is now five times more wealthy. Our reforms have been impactful but incomplete.
Raising per capita income needs higher productivity in our regions. Karnataka and UP have the same GDP though Karnataka has a fourth of the population. Sectors IT employs only 0.8% of the labour force but generates 8% of GDP. While agriculture employs 42% of the labour force but only generates 15% of GDP. These structural transformations require valiant reform in formalisation, urbanisation.
Raise take-home Salaries: Our laws command the world’s highest compulsory payroll confiscation. The 42% for low-wage employees (this deduction is only 9% for employees with salaries higher than Rs 25,000 per month). Holding employer contribution mandatory, we should modify Clause 6 of the EPF Act. Also Clause 39 of the ESIS Act to make employee contribution voluntary.
Massifying Employability: Covid has hurt education but accelerated online learning, non-exam assessments, and made skills more valuable. And immediately license every university for online learning.