Major challenges ahead

NDA’s 3rd Govt

By Dhurjati Mukherjee

With the economy showing some resilience, the challenges before the new government are indeed quite widespread. There is also talk whether the coalition partners of the BJP can ensure stability in the long run. The dependence on the TDP of Andhra Pradesh and JD(U) in Bihar and other smaller parties and fulfilling their aspirations and demands would not be quite easy. Moreover, the Opposition pressure created by the combined INDIA alliance would have to be borne by the government.

Political analysts are questioning whether the dependence on regional party allies could well result in regional inequality gaining more attention than it was earlier. The new government would have to depend on support from Naidu and Nitish, both of whom represent states that have long-standing demands from the Centre. Andhra Pradesh had been promised a substantial grant when the original state was divided, and Bihar has been clamouring for a special grant as also conducting a caste census throughout the country. Incidentally, the NCP in Maharashtra has already turned down the MoS berth and sought Cabinet status in the Council of Ministers, announced on Sunday last.

Meanwhile, the TDP may release a white paper on the financial situation in Andhra soon after assuming office, highlighting the state’s massive debt burden, the dire fiscal situation, poor infrastructure and the weak investment, both by the government and the private sector. Whether these grants, even if partially met, would not raise similar demands by other states and whether they would not upset the fiscal balance remains to be seen though, however, Andhra’s demands cannot be totally ignored.

On the economic front, the biggest problem that needs to be tackled is the spectre of rising youth unemployment, which threatens to negate the demographic dividend that India is enjoying with one of the youngest populations globally. According to statistics recently released by the periodic survey of labour force by the central government, the average percentage of urban unemployed for those in the age group 15-29 in January-March 2024 stood at 17 percent. The situation this year is so grave that 35 percent of all IIT graduates and nearly 20 percent of IIM graduates are still looking for jobs.

A dozen states reported an over 20 percent unemployment rate during this period with one of them even reporting a 30 percent plus unemployment rate. The causes for this dismal state of affairs are many though one principal reason has been the slowly worsening situation of the small and medium scale enterprises in India, which employ nearly 111 million people. Their decline has meant fewer jobs are being created.

At the same time lack of skill training for our youth which would make them employable and replacement of workers with increasing automation and robotisation in most large sectors of industry has meant crowding of workers in farming, the informal sector and construction, where the quality of jobs is suspect and under-employment rampant. Obviously, retraining youth to upgrade them in skills which the world wants — whether those be industry specific or in terms of general training — is a must. The Skill India mission has been a good step but adequate job creation by the Indian industry is a big hindrance.

Apart from unemployment and underemployment and price rise, which has been hurting the common man, an appalling trend has been wealth and income inequalities. Also, Modi’s patronising some select corporate houses has been criticised. These have been recorded in various surveys but did not lead to remedial measures by the government. Modi was accused of indulging in crony capitalism and insensitive to the pains of the poor. The 5 kg of free rations to 80 crore Indians outlived its utility with the people demanding jobs instead. All this led to a decline in BJP’s vote share as it got 36.6 percent of the semi-urban votes and 35 percent of the rural votes.

Additionally, it may be mentioned that Agnipath, the short-term contractual scheme for soldiers, exemplified the unemployment challenge and both the major coalition partners, the TDP and JD(U), have already voiced the need for scrapping it. They seek something long-term or permanent in its place and the government would need to seriously think about bringing in some other the scheme.

Talking about the governance pattern of the new government, one can say that the autocratic approach may need to change in the coming months. Though the BJP’s top three-four leaders may call the shots, the views of the Cabinet in crucial matters must be taken into consideration. Moreover, with election round the corner in a few important states, which includes Maharashtra, the focus of the government would have to be on reaching out to the neglected and backward sections.

Infrastructure development in core areas such as power, railways, manufacturing is expected to continue to receive priority and adequate funding in the coming years.  But while government funding has been quite massive, the private sector is not coming up with adequate support. Whether the present government would be able to generate private sector funds in manufacturing and infrastructure remains to be seen.

On the agricultural front, the distress situation has affected many parts of the country. The rural scenario has not been at all favourable to the BJP for which the party has to think of a change in strategy. Meanwhile, reports indicate India’s agriculture production growth was down to 1.4 percent in 2023-24 down from 4.7 percent in the year before. A flour millers’ body has come out with a widely accepted estimate that India will produce 105 million metric tonnes of wheat this year, which would be significantly lower than last year’s 112 mmt. Production of cereals, pulses and oilseeds have also been lower than a year ago in 2023-24.

This not only means price shocks may be more frequent for consumers, but also that farm production and incomes will be challenged. India had dipped into its wheat reserve stocks last year as production was challenged even as demand for wheat, both for consumption as well as processing, spiked. There are reports that the country might consider the unprecedented step of importing wheat after many years to replenish stocks and cool down prices. A similar situation in rice could be even more disastrous, as more farmers depend upon rice cultivation to make a living and Indians consume about 102 kg of rice a year per head.

Finally, stability is what the people want from this coalition government apart from specific welfare measures that reach down to the bottom levels of society. But there has to be a judicious approach to development and transparency in all decisions taken by the new government. With a strong Opposition, the government will be forced to maintain a balance in allocation of resources even though coalition compulsions may force it to favour Andhra Pradesh and Bihar. Only jargons and promises may not help achieve a decent livelihood for the distressed and backward sections of society. — INFA