There is a thrill of excitement in the air as the country awaits results of its longest parliamentary polls since 1952. A new government will be sworn in sooner rather than later and it will obviously get down to the task of taking forward the country.
The new government of course will be aided by the singular fact that India reported last week a GDP growth rate of 8.2% for the financial year just gone by, making it the fastest growing economy among the top ten in the world.
While it may gain some succour from this achievement, nevertheless, the challenges before the government which will be sworn in will certainly remain a-plenty.
The biggest of them perhaps is that of 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%. A dozen states reported an over 20% unemployment rate during this period with one of them reporting a 30% plus unemployment rate during this period.
The causes for this dismal state of affairs are many — 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 automomation 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.
The rising unemployment figures have another ugly side — people smuggling out of India in search of work in places ranging from the US and Europe to Cambodia and Russia.
Finding these youth jobs, preferably quality ones, is a priority for Indian society as the alternative could range from unrest and social strife to an alarming rise in crime and political chaos on our streets.
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 is a good step forward, and the numbers quoted of those who have been trained or upskilled sound impressive. However, the actual results which should have seen our workplaces being flooded with trained manpower are still awaited. Anecdotal evidence shows many businesses find it increasingly hard to find the right man or woman with the right skill sets needed for the jobs they have on hand.
The recent flurry of headline news in most newspaper and television channels that many places in India including the capital city of Delhi experienced 50 degree plus temperatures has only highlighted what many saw coming — climate change is upon us and will affect the country’s life and economy in many ways in the years ahead, to the extent that it may well pose a challenge to India’s growth story.
In short in any top five challenges facing the next government, managing the fall-out of climate change will have to be one of the biggest priorities.
India’s agriculture production growth was down to 1.4% in 2023-24 down from 4.7% 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 will 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.
It naturally flows that the monetary policy framed by India’s central banker — the RBI — will be similarly challenged in trying to balance the needs of checking inflationary bursts by raising interest rates and giving cheaper loans to both businesses and agriculture.
The other grave threat flowing from climate change will be to India’s power generation capacity. Hotter summers will mean more demand for cooling- both homes and workplaces. Power generation was pushed up by a huge 9.4% in April this year to meet the unprecedented demand. The growing demand in May-June has meant more frequent breakdowns in many metropolises and industrial centres. A breakdown in the stretched power supply system could be another challenge to India’s growth story, similar to the one the country faced in the 1980s and ‘90s, when both power generation and transmission were racing to meet India’s growing electricity demand.
The challenge could be met by a combination of climate mitigation measures to ensure the fight to control temperatures is addressed across the country by extensively greening the land, conserving water and rebuilding traditional channels of water harvesting on the one hand and increasing renewable power generation capacity on the other — ranging from the chain of nuclear power plants long planned, to solar and hydrogen cell power plants among others. But to do so, technological hurdles which still makes these power sources costly as well as inertia in policy making and implementation has to be overcome.
Climate change and sudden climate shocks such as cyclones and intense heatwaves means that the progress that India made in healthcare will also remain challenged in the years ahead.
India is in any case in a state of epidemiological transition where the pattern of mortality and disease is slowly changing from one of high mortality among infants and children and episodic famine and epidemics to one of degenerative and human-made diseases, which itself is placing a huge transition burden on its heathcare set-up.
The new diseases unleashed by climate change or by climate episodes will mean healthcare infrastructure, especially in suburban areas, will remain more than stretched for years to come.
At the same time in the absence of a functional and robust public health care system, the demand-supply gap in healthcare will widen, increasing healthcare costs for the entire nation, the pinch of which will of course be felt most acutely by the elderly whose income is usually subject to the vagaries of interest pay-outs on their life’s savings.
One will have to see how the state and the new or ‘not so new’ regime which gets to run the ship of India tackles these challenges and takes the nation towards its promised place in the sun. Hopefully while the sun is still shining.
The writer is former head of PTI’s eastern region network
