 We are already seeing green shoots when it comes to economic recovery. Thanks to all of you for joining us for this webinar series. For the last few months, the media has been abuzz with claims of rapid recovery and record growth for the Indian economy. There has also been claims that the pandemic induced crisis is behind us and we are well on our way to pull the world's fastest growth this year. We heard the Prime Minister saying that our economy has recovered more strongly than it was halted by the pandemic. Though through this series co-hosted by the centre for financial accountability and news click, we intend to interrogate this idea of magic recovery that has been projected. We will try to question how much of such claims actually hold when confronted with the reality. How much of it is just a number game? What has recovery actually meant for the people and what should a meaningful recovery actually look like? Today is the first session of the series which is titled The Numbers Behind the Record Recovery. What are they showing and what do they hide? Following which in the coming weeks we would have on the 3rd of December another session of the series where we will evaluate the government's proclaimed steps towards recovery. On the 6th of December we will once again in another session joined by another set of panellists we will discuss what has recovery actually meant for the people and on the 10th of December being the last session of the series we will discuss what should have been a people centric recovery and what it should have looked like, what it should have meant for the people. The series will be moderated by Paranjoy Guha Thakurtha. He is a senior journalist but that is just one of his many hats. His main areas of interest are the working of the political economy and the media in India and the world on which he has written and also made documentary films. He is a writer, speaker, anchor, interviewer and teacher. He has served as the editor of the Economic and Political Weekly. He has been a consultant with means quick. And we are thankful that he has agreed to anchor this series with us. Given the demagoguery and the high decibels in the newsrooms we have been turned into a country that lives in short bursts and even shorter memories. The hardships of the lockdown, the complacency and the debacle of handling the second wave the bodies floating in the rivers and the migrants on the streets are already being erased from public memory while the economic policies are geared towards favouring big capital. In such a context the series is a part of our efforts under Ekonomi Pacharcha aimed at allowing more public discussion around issues of finance that touch each of our pockets and our prospects. Without taking much more time and hand over the stage to Paranjay for his initial remarks for introducing the panellists of the day and taking the conversation forward. Thank you. Thank you so much, Anirvan. Thank you everybody who is viewing this program. It is my honour and my privilege to be moderating this series of discussions which examines the claims that are being made by the government on the economy. Before I introduce the three panellists who will be speaking on the subject I'll give a broad overview of the theme and we'll divide our conversation into three broad overlapping segments. In the first segment we look at the numbers we look at the claims that are being made how credible are those claims then after we look at certain specific issues the policy prescriptions and to what extent have they worked or not worked and finally we look ahead in the last segment. Now what we see is that for a period of almost three years the rate of growth of India's gross domestic product had been steadily decelerating and it came down to a low a low that was really a 42 year old low or GDP growth figures I mean I'm talking about nominal rate of growth of gross domestic product it came down to a 42 year low in January 2020 then after came the sudden lockdown and the government's own figures tell you how what kind of impact it had I mean those figures are certainly questionable and they will surely be questionable but even what the government has claimed is significant in the first quarter of financial year 2021 that is the months of April, May and June 2020 India's GDP India's gross domestic product actually shrunk arguably for the first time in the history of this country by almost 24% never before has the Indian economy shrunk and then we entered into what the Americans called a phase of technical recession because in the next quarter that is July or September the economy shrank according to the government by 7.5% the point is that what we know and this is for very very very very sure that these numbers have to be seen in a certain context economists often talk about the low base effect and I'm sure the speakers will be explaining these in greater detail but before I come to the speakers let me quickly tell you what the government is claiming the government is claiming that India's rate of growth of GDP has rebounded in the first quarter of the current financial year in the months of April, May and June 2021 with a record growth record growth of 20.1% for the entire financial year which will end at the end of March of 2022 various estimates are there there are estimates made by the World Bank the International Monetary Fund and of course others as well but those numbers vary from 9% to 10% and it is argued that this will be double the rate of growth of world GDP global GDP double that of the United States of America and about one and a half to two percentage points above the projected rate of growth of China will this really materialize is another question that our panelists will look into now the Reserve Bank of India as the government of India I mean they are both making certain claims but there is a slight difference in the claims the Reserve Bank of India estimates GDP growth to be 9.5% and the government of India is saying it's closer to 10% and the Finance Ministry has been claiming that India is on its way to becoming the fastest growing major economy in the world now what this means the fastest growing and what are its implications on various sectors of the economy the social sector healthcare education the infrastructure and looking at employment these are some of the issues that our panelists will be dealing with let me quickly introduce them they are all eminent economists in their own right we are very happy to have with us Professor Shurajit Das he will be the first speaker he is an assistant professor at the Centre for Economic Studies and planning at Jawaharlal Nehru University he has in the past worked with the Planning Commission the Finance Commission and he looks at macroeconomic trends very carefully and from a pro-people perspective I understand with us here is Professor Deepa Sinha she is an assistant professor at the School of Liberal Studies at Ambedkar University in Delhi and over the years she has been actively involved in the Right to Food Campaign and she is immersed deeply into issues of nutrition and food security she will be the second speaker and the sorry, she will be the third speaker the second speaker will be Ibegya Badan Professor he is an associate professor at the ISID the Institute for Studies and Industrial Development and he has written on various economic issues but a lot of his work has been focused on labour and employment and structural changes looking at emerging trends in the manufacturing sector human development and the political economy of informality so let us start to speak for approximately 10 minutes and we will first examine the veracity or the credibility of the numbers that have been put and then we will also ask them to look at the claims that are being made the claims that are being made are pretty I mean I will give you one example here is the Prime Minister saying that Covid 19 affected the economies of the entire world including that of India the economy has recovered most strongly than it was halted by the pandemic is this correct? how correct? Prime Minister Narendra Modi also says when big economies of the world were busy defending themselves during the pandemic we were carrying out reforms later in the discussion towards the end of the discussion we are going to look at what these reforms were the Prime Minister talks about global supply chains when global supply chains were disrupted we are going to use the PLI the production linked incentive scheme and to turn new opportunities in favour of India and Mr Modi finally says we should look upon ourselves as the global economic leader as in the 21st century India does not have a scarcity of opportunities to make it big so that is it I stop now I have spoken quite a lot more than I perhaps should have talked about the issues and I am sure the panellists will talk about it private consumption demand look at corporate tax cuts and so on and so forth so let's start with you Shuriji thanks a lot for Anjai sir and at the outset I must thank Centre for Financial Accountability and Newsclick for inviting me and giving me this opportunity number one is the credibility of the numbers as far as I am concerned in my opinion the numbers which have been officially announced are as credible as they were earlier so I mean there should not be any confusion of course these numbers have a lot of limitations we know that these are quarterly estimates and our GDP if we can broadly divide our GDP in three sectors major sectors agriculture industry and services then on agricultural sector we get data twice in a year Ravi season and Harif season industry data reliable industry data comes only once in a year that is annual survey of industry is the source sector data reliable data is collected once in five years through economic census and in between and it is important to mention here that service sector is more than 50% of our GDP so if an annual GDP numbers have their own limitations and as far as the quarterly numbers are concerned there are some high frequency data based on which central statistical office nowadays it is called NSO national statistical office they make some projections so most of the economists particularly macro economists they don't take these quarterly numbers seriously there are a lot of limitations however when the actual data arrives when the first revised estimate takes place then second revised estimate takes place then actual figures are available almost after two years from the current situation from the current days so if I say today that 2018-19 GDP numbers are more reliable than the numbers which have been projected by NSO for last year or for first quarter of this year then nobody would take interest in the GDP numbers of 2018-19 however I mean those numbers are the reliable numbers quarterly estimates and also the first revised estimates or the provisional estimates of annual GDP numbers have got their own limitations having said so I must tell you that GDP numbers per se I mean these numbers may not reflect may or may not reflect the reality depending on our perception of the reality but these are the available information that we have as far as the macroeconomic situation is concerned so if numbers are bad they were bad earlier also if numbers are good they are good now also so the credibility of the numbers didn't suddenly go down probably during the this lockdown or pandemic the second point which I want to make is not only in India the lockdown has happened all over the globe we know all the countries have been affected the GDP growth rate have come down and all the economies have more or less suffered and the recovery rate also varies widely country to country economy to economy as far as the first quarter data of this financial year is concerned the CSO says the growth rate would be around 100% in the first quarter as compared to the first quarter of last year when the growth rate was minus 24% now Paranjaya sir was talking about low base effect I must tell you what it is it's basically if GDP happens to be 100 crore rupees and if it falls by 25% then it would become 75 crore rupees now after that if there is 25% growth instead of minus 25% if there is positive 25% growth then GDP does not come back to 100 it would be lower than 100 to reach to 100 again we need 33.3% growth not 25% growth so that's the because of the low base effect so even if after minus 24% growth of the first quarter in the last financial year even if we would have had plus 25% growth this year in the first quarter then also our GDP would not have become what it was before lockdown so there is no question that you know the recovery has been complete or recovery has taken place or as Paranjaya was saying reportedly that there is a claim that actually our recovery was higher than the negative shock that the economy faced due to lockdown during the first quarter of last financial year so it is yet to recover now recovery can be seen in two ways in my opinion one is the level of activity or the GDP or if you like to add it of a country that whether that has become equal to what it was before lockdown that can be called recovery the other way of looking at it is what our growth rate used to be before lockdown it came down as Paranjaya sir was telling that it was decelerating it became almost 4% in 2019 2020 from 6% in 1819 and before that it was even higher so if we have to go back to our 5 to 6% growth rate which was usual before lockdown then the recovery would mean something else so recovery of the growth rate and recovery of the GDP or the gross domestic product or the level of activity are two different things now even if the growth rate remains 0% that means the level of activity remains the same so that can be called recovery but I would like to argue that by recovery I would mean particularly in the context of Indian economy if we can go back to our usual growth path of 5 to 6% of growth annual growth at least so that is as of now it is looking like far reaching for the time being we can maximum hope that in this year probably we can achieve a 0% growth rate as compared to the GDP of 2019-20 that is before lockdown GDP but nobody is even hoping that there would be a positive growth rate of 5 to 6% over what our GDP was in 2019-20 before lockdown for that I mean in the next session probably next section of the discussion probably we will take it up that what could have been done what should have been done what has been done as compared to that and how to expedite the process of recovery and how to reach back to our usual growth path sooner than later thank you thank you so much Shurujeet for that your initial remarks and the overview you have given let me come to Shaktuki and I just add a few points to what I already mentioned the pandemic there is evidence to indicate that it large numbers of Indians were pushed into poverty they may have been a little above the poverty line we can again discuss what is the poverty line how do you define it but the point is their economic condition deteriorated and they were pushed into poverty one number that I have is there were 33 crore 330 million Indians who were pushed into poverty we also have a lot of evidence to indicate that the inequality of income and wealth group the super rich the oligarchs their notional wealth grew in this period having said that there are also indications that there is a resumption of the manufacturing activity relative improvement of the service sector uptake in power consumption but as Shurujeet was saying is it too early to start celebrating and especially we want to look at what is really a meaningful recovery and really the crucial factors that should cause us concern and here I just ask like two points one is the issue of employment and I'm sure you will tell us in greater detail what the data of the government we don't have much data of the government so we have to depend on data of the CMIE the center for monitoring Indian economy but also if you could talk a little bit about the disturbingly low consumer demand that is happening private consumption demand which is one of the important drivers of growth is back to its level that was in 2017-18 so we know households are not spending aggressively there have been job losses higher expenses on healthcare energy so these are some of the additional points I would like you perhaps to add and I'm sure Deepa will be also able to add on some of these points. Please over to you Professor Shattoki Roy Thank you Porinder so taking off from what Shurujeet has already mentioned I will add some of the figures because the claim is that the recovery is record in the sense then which is actually correct if one says because if you compare the data of quarter ending June of 2021 21-22 with 2021 then the recovery is the growth is about 20.1 percent which is perhaps the highest in India comparing quarterly estimates since when the whole quarterly estimates figures were issued from 1996 so this is the highest growth if you see comparing quarterly estimates of 2 years but it is also true that if you compare the quarterly estimates of quarter ending June first quarter of 21-22 with quarter ending June of 2019-20 then we will find out that what actually happened because the contraction between the first quarter of 1920 and 2021 was roughly 24.4 percent so in the previous year if you use the quarterly estimates and find out the level of contraction then it was 24.4 percent and when you are comparing quarterly estimates of first quarter of 21-22 with respect to 2021 then there is a growth of 21 percent so first of all the amount of contraction that happened has not been taken care of by the growth which has been projected although Reserve Bank of India is also saying that the growth figures need to be upskilled in the second and third quarter now coming to the question of where actually we need to seek because this is quite normal that when the economy dips because of some abnormal situation pandemic or something there would be a contraction which would be huge and at the same time when situation eases off and when business as usual are restored people go to their work factories are opened agricultural activities are once again restored and all these things happen it is quite natural that there would be a rebouching there is nothing abnormal about that but the point is we need to see we have come back to 2019 scenario or not which is the pre-pandemic scenario and I am saying that of course the government is claiming that there is a big shape recovery and very fast record kind of recovery happening let us read economic survey of the same government what they actually told in the economic survey in the past economic survey assessing the situation of COVID-19 and its impact on the economy the government suggests or the survey suggested that if the 6.7% growth rate which is the 5 year average in the pre-pandemic scenario if that continued then in 2023-24 we could have reached a certain GDP which was basically disturbed because of the pandemic and now the economic survey suggests that if we have 10% growth rate in 2021 followed by 6-7% growth rate in 21-22 and 23-24 then also the GDP that we will achieve at the end of 23-24 financial year would be 90% short of what we could have achieved if the trained growth rate was continuing so it is easy to say using year to year comparison between both in case of contraction and both in case of recovery it is not actually very prudent to arrive at some conclusion on the basis of these features because as Surajit had mentioned and you also have mentioned in the initial introduction that when we talk about low base if the economy falls from 100 to 2 and then it grows up to 4 then it is 100% growth rate but if it grows from 100 to 102 then it is only 2% growth rate so just looking into those year to year figures would not give us the answer now comparing the figures of 21-22 first quarter with 2019 which is the pre-pandemic scenario what do we get we get first of all that in case of private final consumption expenditure the level is 11.9% lower than what it was in 2019-20 first quarter gross fixed capital formation is 17.1% lower than what it was in the first quarter of 2021 1920 only where we see some positive recovery in the sense that where the growth rate is probably recovering at a level which was in 2019-20 first quarter which is exposed we find 8.7% positive growth rate during this quarter going to manufacturing if you see in manufacturing sector the gross value added after the first quarter of 2021-22 the figures that we receive it is 4.2% lower than what it was in the first quarter in the pre-pandemic situation in 2019-20 only sector that recovered and reached a level probably in the level what it was in the pre-pandemic scenario is the utilities which is electricity, gas and water so all the sectors what we see are basically showing some activity growth during this period but if you compare with the pre-pandemic scenario most of the sectors have not actually reached the level what it was in 2019 now coming to the employment scenario I will make some comments regarding sectors and later on to the nature of employment that has increased precarity has increased during this period of time now of course there is a reversal if you compare the PLFS of 17, 18, 18, 19 and 19-20 periodic labour force survey then what it shows that during the period 1920 there is a reversal of employment from non-agriculture to agriculture the share of employment in agriculture has increased this is primarily because of the component or the increase of what we can say of farm labourers not the farmers so the people who are working in construction sector and other non-farm activities are back to villages and relying on agricultural activities if you consider non-agriculture which is manufacturing one can see that the figures were that in 2019 in the pre-pandemic scenario total 40 million people were employed in manufacturing sector as a whole 40 million now this came down to almost half to 21 million in April 2020 which is understandable and that is because of the pandemic it picked up to 30 million in 2021 February so in February it has recovered to 30 million now the latest figure of CMI which says that it has again fallen back to 28 million in August 2021 and those who are doing industry studies they see that there is a hysteresis the effect of continuing with the same employment level is there because already the employers are taking resort to other kinds of productive activities which employ less employment so whether Indian manufacturing sector would go back to the 40 million employment in manufacturing to its pre-pandemic level or not is not very sure at least the way the growth is taking up so what I would say that these facts basically suggest that of course there is tendency which is quite normal that once situations ease out then there would be activity levels increasing it has its effect on the economy as well but it is by saying that it is a record recovery it is nothing but one can say that infantile jubilance because you are basically using the low base and trying to claim that something is happening which is very great my final point in this regard because you mentioned about the kind of inequality and other kinds of issues that are visible because this debate is also there this is a k-shaped kind of recovery what we see that 35 percent increase in the wealth of billionaires during this period of time during the pandemic and if you go through the figures of listed companies of non-financial sectors we will find that this is the period when the growth of reserves and surplus it grew by around 15 percent which is a record level in the past decade and most of these corporates you see that the debt to credit ratio as well as the gearing ratio has declined during this period of time because they have enough surplus so this is the time when Mukesh Ambani became the fourth richest person in the world and his earnings during the pandemic was about 90 crore rupees per hour when one fourth of the Indian population was earning less than 3000 rupees per month so here I end and perhaps later on we will take up more details. Thank you Thank you so much Professor Shakthakiroy for giving us your views that was a very an excellent overview you gave and Deepa ji I am coming to you right now Arthashasthi explained in detail how India has the status of GDP the status of the house there is a lot of questions to be raised they raised a lot of questions and they also said that the way the problem of employment and I want to say one more thing the way we have seen the workers left the city and went to the village in the history of the world in the history of the world we have not seen the growth of millions of people on this issue the government does not want to say much but the issue of unemployment the issue of inflation and at the same time you on this issue you have studied and you this small business has ended a lot we are seeing that from everybody GST goods and services tax we saw how 5 years ago as a note was made and the education the health the development of health on this issue your opinion we would like to hear from you and the Prime Minister the Prime Minister's farmer's farmer's so till March until then the election of the country will be over so your opinion is that in the social sphere education the situation of women employment small business on this the government's last and your opinion thank you first of all you have finished with this tell me about the officials all these issues which you have just made on many things there is no use because when there is no anchor anyone can say anything and it becomes a record and we are seeing that the anchor is also being explained in a wrong way these are our last two times they have explained very well that the record recovery that is happening that 20% of the water has died if we see in the last year's we are not old we are still behind 2 years ago we have not reached there so it is important to understand that both last time they said that this heightened rate of growth has the low base effect that they spoke about that you need even much higher growth rate to even come back to the level at which we were asking this question I would like to go ahead with the growth the first thing is that the type of recovery is not happening but if we talk about recovery then in what way is recovery in which type of recovery and who are the people and in which way it will increase we will say that recovery is happening because we have been seeing recovery is happening on one side but on the other side there are hundreds of such people who come to their homes in their families they are not increasing and there are many such people who are not increasing at all even before the pandemic we know that the last 3-4 years post demonetization, GST and so on rural wages for instance have been stagnant for 3-4 years and even after the pandemic we are seeing that in rural areas the wage if we adjust in real terms then there is no increase on that in the last 3-4 years and after the pandemic it has started to happen so the first thing is if we look at the wages how much people are earning there has been no increase and after the pandemic it has started to happen so we cannot say recovery second thing which is unemployment once again it is very uneven in the sense what is the job the first job which was in the Asangatic region which people used to work who did not have any savings and we are still seeing after the second wave many field services have not been done but the first wave after last year in the end of 2020 the field survey that was done by ASEAN Premji University all these services were shown in the period of December-January already about 2-3 people were saying one simple indicator if we take what is your what you are eating is more or less before the pandemic when this question was asked in different services more than 60% people said after the pandemic the amount of food is less and this is not during the national lockdown this is 6 months after the lockdown ended and when we go into detail we see what are the kinds of things that people stopped eating people stopped eating pulses or reduced the quantity of pulses, of oil, of eggs, of vegetables of fruits and so on after the second wave like in Delhi I have worked in many areas after the second wave we are seeing that many families after the first wave were taking care of themselves they were moving ahead the same family also came after the second wave because they had little savings of some people not just because the curfew and lockdown but also because of the health and we do not have any problem we know that in many hospitals many patients were ill they were not getting medicines people were buying oxygen and this has affected people the growth was not that much the second wave is unemployment the third wave we are seeing two things like I said the wages are getting less and the second wave we are not getting as much work like in a week people are saying that if we are looking for a job then maybe we will get a job in a day or two people like us do not get unemployment because they are getting some work but the work that we are getting the next round we will be able to see along with that one more thing on which we did not talk about recovery and especially its impact on the poor is the issue of inflation after the second wave the increase in the dam we are also starting to see and it is true that food inflation CPI consumer price inflation is not that big but you go on a commodity like the price of petrol this impacts the entire household budget in so many ways like one sector that is shown very positively that it has a lot of benefit that is Geed workers if you talk to these workers they do not get any different stories that their rate card is reduced along with that the price of petrol is reduced this is the effect of dams in different sectors I was saying that the kind of food that people have reduced the dam has increased food oil for instance edible oil prices have really increased in this period so overall I would like to conclude this section when we talk about recovery I think it is what Paranjoy also said in your introductory remarks we really need to interrogate if it is a meaningful recovery the growth rate will keep increasing in this period there are a lot of issues but even if the growth rate increases what is the growth and what is the impact on people's lives we need to interrogate that too we are seeing that the growth rate is increasing and there are many indicators like the Azim Prem ji estimated that 230 million people fell into poverty post the first wave again that is before the second wave where they look at the minimum wage as the poverty line or recently the government started the Eashrom portal of unorganized workers in which the labourers can register themselves 2 months ago 5.5 crore people registered according to that data 92% of the workers registered on the Eashrom portal were earning less than 10,000 rupees a month I think that one also is enough for us to ask what kind of recovery we are talking about I will end my comments on the first round Thank you Deepa ji Suraj ji Satya ji what you said the problem of this the problem of the labourers the problem of small labourers the problem of the labourers the problem of the labourers the problem of the labourers the problem of our speech on this you have a lot of issues it becomes now to the second section of our discussion and I will go in more or less the same I will go in the same order that I did what was the government's reaction faced with mounting criticism government was not doing enough what spending enough we saw Finance Minister Nirmala Sita Raman announce a slew of schemes and this was in really the middle of 2020 now when people look at those schemes very carefully it was already fine for her to say it adds up to 10% of our GDP it sounds very impressive but when people started breaking down those numbers you find that certainly about 90% of that what repackage schemes the same scheme being repeated in terms of additionality it was barely 10% so instead of 20 lakh crores the so called stimulus package should have been actually 10 crores or thereabouts or maybe a little more than that now the government's reluctance to spend has been sort of made out as if it's some sort of a virtue and I'll give you a few quotes and I'd like all three of you to react to what was said in the month of November the spokesperson of the Bharati Janata party on economic matters that is Gopal Krishna Agarwal he said that the biggest risk to global the global economy as well as the Indian economy was what he said premature hardening of interest rates on account of inflationary pressures and then he said India's handling of the economy was much better than other countries which resorted to printing money, distributing cash and this is the exact words he used we did not resort to uncontrolled deficit financing fiscal deficit financing our government followed prudent economic policies in spite of intense pressure Mr Modi's government followed a calibrated approach in its economic response with staggered fiscal stimuli and focused on targeted delivery through DBT direct benefit transfer we also see some other economists I mean for instance Richard Sharma the chief global strategist for Morgan Stanley he says he published a report which he says that countries which were heavy spenders and in his opinion reckless spenders their recovery was relatively poor and countries that in his words spent wisely and spread their efforts in managing the pandemic they did better in terms of growth so Mr Modi according to them did not randomly spend or distribute cash but spread its efforts in reaching the poorest targeted cash transfers giving them food developing vaccines ramping up the health health infrastructure etc etc this is not what I am saying I am nearly quoting the spokesperson of the Bharti Janta party Mr. Gopal Agarwal and Richard Sharma of Morgan Stanley so Surajit if we can start with you will you like to comment on the government's reaction and the way it reacted yes I don't know whether I would be able to react exactly to these comments made by spokesperson of some political party or not but let me react to these claims in general I mean briefly I want to mention that we were also carrying out one telephonic survey with the help of our friends in 15 states and I don't want to now discuss the results in detail now I mean in some other occasion we can do that however the I mean we have surveyed around 150 households comprising of around 14,500 people during the lockdown and I mean according to our results 46% of the households lost their entire income during the lockdown and around 50% of the households have become indicted others could manage with their past savings and because the expenditure could not come down proportionately as the income failed because of the lockdown and also there were extreme vulnerability in the mind of people about the future stream of income then everything was uncertain people were hit disproportionately we know the burden of the lockdown fell primarily on the poor rather than the rich and as a result of that I mean there was unprecedented misery and I was afraid of a large scale widespread famine in this country initially however that could be avoided probably because of two major central sector schemes one is public distribution system second is Mahatma Gandhi employment you know national employment currency scheme so people have got some relief at least so that no famine could be avoided but the situation at the ground level as far as our survey is concerned is extremely miserable so having said so you have mentioned about Atman Irvar Bharat Avijan package and before that there was this Garib Kalyan package which was incorporated later on within the Atman Irvar Bharat Avijan package out of this 20 lakh crore package you are rightly say that hardly 1% of GDP which is around 2 lakh crore rupees of the package would be the financial commitments of the government all others where either in terms of liquidity infusion or some measures which were taken by the Reserve Bank of India in order to enable banks and the financial system to provide deliver more loans and so on so forth 75% of the package was all about that I remember I wrote one paper during that time that if you look at the credit deposit ratio of all the commercial banks in India taken together that was continuously falling since the lockdown was announced in March 2020 and it even after the announcement of Atman Irvar Bharat package even after giving MSMEs and farmers incentives to borrow money from the financial sector at easier terms at a lower rate of interest with government guarantee without any collateral etc the credit deposit ratio did not become so the investment rate in the economy was not picking up simply because of the fact that there was not profitable opportunity in the market and the large majority of the masses they have lost their income as a result of that their consumption demand came down and as consumption demand comes down it reduces the demand for almost all industries and obviously market is down it is not a good time to invest and investors should not take the risk of investing more money now in this kind of a depressing situation so that is and that time many of us were actually arguing that the fiscal policy expansionary energy and demand management policy is the way out to get rid of this kind of a problem that government actually goes for higher spending particularly in social sector because social sector expenditures expenditures on health education etc etc actually goes to the poorer section of population whose consumption propensity is higher than the richer section of population and it would have a larger multiplier impact and it would help the economy it would give the required demand boost to the economy so that the economy would recover soon as far as the I mean was mentioning about the employment situation you know I do not believe in this CMI numbers to be frank there are a lot of limitations lot of people have mentioned this that CMI based in unemployment numbers have their own limitations however at macro level even if we take PLFS periodic labor force survey data of 2019-20 and apply the negative growth rates sector wise for major 8 sectors of the economy then I was calculating in the year 2020-21 the unemployment rate would be at least double digit it would be around 12 to 13 percent and not around 6 to 7 percent even in before lockdown the unemployment rate was around 5.8 percent which is around 6 percent on top of that there has been a negative growth rate of around minus 7.5 percent so I mean a rough calculation would tell you that probably even if we assume the labor productivity to remain constant which increases every year by the way even if we assume that to remain constant then your unemployment rate would be 5.8 plus 7.5 so around 13 to 14 percent and since sectoral distribution of labor is little different so it would be around according to our calculation around 12 to 12.5 percent that is the unemployment situation which was prevailing probably PLFS data is yet to come for the year 2021 so we would see that there are a lot of probably open unemployment rate may not be that high however lot of people would be there with zero income employed with zero income that category would be very high because more than 50 percent of our workforce total size of our workforce in India is around 43, 44 crores total size of the labor force is around 51 crores and more than 50 percent of our workforce is basically self-employed they are all these small shopkeepers and auto drivers and taxi drivers and so on so forth most of them are engaged in informal unorganized sector so even if they open their shops if there is no profit then they don't earn any income so employment with zero income that category already PLFS 1920 has shown for the last quarter that is the first quarter of lockdown that this I mean if you consider this to be unemployment then this category of unemployment has increased enormously so including that that is people employed with zero income plus open unemployment it would go up to more than 12 percent in 2021 in my opinion as far as the inequality is concerned I think the the root cause of this whole thing whole debate that whether our GDP data or growth data is reflecting the reality or not why people are taking so much interest now and they were not taking earlier etc. are coming the root cause is basically this inequality I was calculating we don't have I mean reliable data on consumption expenditure after 2011-12 but if we you know index it to the inflation rates and in 1920 prices according to 2011-12 consumption expenditure data 80 percent of our urban households their consumption expenditure is less than 23000 per month and for rural households it is less than 12500 rupees or less per month for 80 percent of rural households so that way the per capita consumption expenditure would be less than 6000 rupees in urban India and less than 3000 rupees in rural India for 80 percent of the households now given this kind of inequality and obviously we know that the burden of this lockdown has disproportionately affected the poorer section of population most of them are engaged in informal unorganized sector and if there is a reduction of national income by let's say 7 to 8 percent then probably the income which are earned by this 80 percent population I am talking about the apart from the richest 20 percent population their total income I mean would be I mean it would it may very little bit but according to my calculation it would be something around 30 percent of GDP so 80 percent population earns 30 percent of GDP and if that GDP 7 to 8 percent or 10 percent then and if this 30 percent of GDP which is earned by the 80 percent population if that comes down drastically then obviously the kind of misery we are witnessing in our society that would not be matched with the GDP numbers or growth numbers because 20 percent of the population their income may not get affected that much so that's my take on this and as far as inflation Deepa was mentioning I think it's very important to understand that whenever we talk about inflation we don't distinguish between cost push inflation and demand pool inflation now this fiscal deficit raise or expansionary policy lead inflation or money monetization lead inflation etc are demand pool inflation they are not cost push inflation but the inflation that we are witnessing today as Deepa was rightly pointing out that it's basically petroleum price lead inflation or food price lead inflation those are mostly cost push in nature and not demand pool in nature so it has nothing it doesn't have in my opinion any contradiction with expansionary fiscal policy I mean under a situation of cost push inflation if somebody argues that it would not go for expansionary fiscal policy because it could become even more inflationary I disagree because I mean the problem today is that of aggregate demand the consumption demand has come down as a result of fall in income so under a demand constraint situation if demand management policies are undertaken it would not be inflationary or at least it would not cause demand pool inflation in my opinion I would probably raise my case for the time being here I am going to come back to you I am going to come back to you once again in a little while on the third section where we look at certain other issues including issues relating to the political economy of the present situation but I would like Professor Shartopi Rai to elaborate on some several points that have been made both by Professor Deepasena and by you Professor Rajit Das the efficacy or otherwise of an expansionary fiscal policy impact on inflation demand pool cost pool and he has also talked about the numbers which have come out from the CMI the centre for monitoring Indian economy the reason why these numbers are coming out basically we don't have any other data but he is also questioning the CMI data is actually underestimating the scale of the problem of unemployment under-employment what economists also call disguised unemployment or those who are employed but with effectively zero income so maybe you would like to elaborate on these points in greater detail Professor Shartopi Rai so first of all I would say that regarding the policies that you mentioned in your initial comments in the second round of discussion Surajit has explained them but what I would say that basically the point is most of these policies were targeted towards loans providing loans and indirect credit provisions and during a situation when 46% of the household are actually borrowing to survive and you have a drastic cut in real income in the major segment of the society there is a contraction in demand so of course the credit appetite of these small enterprises, micro enterprises were pretty low and so even if these provisions were made they actually didn't contribute to the process of recovery now this is reflected by the fact as I said in my previous discussion that the corporates and I am talking about the listed companies non-financial companies as I said that their reserves and surplus have increased according to March 21 data by 15% but that if you see that what is there the proportion of reserve and surplus that has been used to create new capacity we will find that not much has happened in this regard because there are lot of capacity which is actually underutilized and even if the corporates have lot of reserves and surplus in their hand they are not in a mood to expand their capacity knowing fully the kind of depressing or slowing down or contraction of demand that is still prevailing in the economy now the question that Surajit reads regarding CMI data I am not going into that because if you use the same data and if you find that there is a contraction you can question the extent of that contraction and the only point where I use CMI data is basically measuring the monthly manufacturing employment so the last figure that I said about 40 million which came to 30 million 20 million April 2020 then 30 million in February 2021 and then again to 28 million is the high frequency data which has been provided by CMI the rest of the propositions that I made are basically visible from PLFS and the most important trend that we see if we see the PLFS data 17, 18, 18, 19 and 1920 I am talking about the annual figures during the period when there was a stagnation in the economy when the economy was slowing down because of the pandemic it is also the period which shows a rise in labour force participation rate. Now we need to explain this because the rise in the labour force participation rate in countries like India and also to some extent there was a rise in workforce participation at birth. Now how do we explain this because on the one hand we need to see that which are the components where people are basically more additionally joining into the labour force what contributed to the growth of labour force participation rate. Now the two major components which contributed to the growth of this labour force participation rate one is the female labour force participation rate which increased during this period of time which is to some extent people are saying a reversal of the long term trend. Of course there were episodes where labour force participation rate for a short period for female increased but largely it was declining in case of India due to mechanization due to the kind of jobs where women were first excluded and things like that. So these contributed to that thing but now what we see that the female labour force participation rate has increased during this period of time. The other component which contributed to the labour force participation rate is basically older people above age 60. So older people are more and more joining the labour force to earn something in order to survive. Now if we see the pattern of employment in the sense that if someone says that self employment has a proportion to total employment has increased during this period of time. Now if some says that people are more into business they are doing something we need to see that what kind of self employment is increasing. And PLFS or NSSO makes a kind of categorization of self employment where one is the owner business owner and worker and the other is helper in household enterprises. We will see as Surajit has mentioned that the helper in the household enterprises at the category that has expanded in self employment that has additionally been created during this period and particularly in the rural areas. Now this helper in household enterprises most of them are unpicked and if you see that the share of women in this helper category of unpaid labour is around 62%. So the major absorption and additional employment of women that is being reflected by increasing female workforce participation rate is because of what Surajit was mentioning and that is being reflected in PLFS that unpaid family labour this is the component which has increased during this period of time. So I would suggest that so these are really worrying trends where you find that once again there is a reversal of employment from non-agriculture to agriculture which is basically an increase of farming labour and the other thing is that in case of if you see in PLFS data it is basically the unpaid family labour that component has contributed more into the labour force participation rate. I will end by mentioning one thing because whatever questions you have about CMI data or not, I am not disagreeing that but the point I am making is that CMI CPHs which is consumer pyramid household survey makes a categorization of self-employed The first category is businessmen who are shop owners factory owners, small office owners and things like that. The second category is professional small enterprise self-employed enterprises which includes doctors, lawyers and chartered accountants. The third category is non-professional self-employed enterprises which includes cook, beautician, gym trainer taxi operator, barber, gardener plumber, security guard. Now if we see that the component of the third category of self-employment that has continuously increasing which has been reflected by PLFS as well as CMI The third category of non-professional self-employed enterprises their share in total self-employment was around 62% in 2016 that has increased to 77% in 2020 and if you check the recent CMI data it suggests that it has already reached 80% of the total self-employment done. So what has actually happened in this process is that precarity of the employment has increased what Deepa has already mentioned I will end by saying that this is a scenario which of course does not does not signal some kind of a healthy recovery if someone says that it is K shaped I will say that India's growth trajectory from the beginning in the pre-pandemic period was also K shaped so you have to take a policy which basically favors the poor and inject demand in the economy by putting cash in their pockets so that they can have purchasing power. So the stagnation and the slowing down of the economy was already visible in the pre-pandemic scenario and the pandemic actually accelerated the process the fork of the K has become much more diverse during this process their distance increased so the policies need to be taken basically to address this problem where we can reduce the gap and actually reduce the inequality which is being generated in this whole process so there is stop for the time one minute my mic is yeah okay I hope you can hear me now okay okay so the Satyak Ji and Surajit Ji said you should move on to our discussion one is what impact is on women during this period what impact is on women Satyak Ji said you should move on to our discussion they also said we are not ready to spend we are not ready why? why are we not ready to spend all of this the problem of demand side you are trying to make it better to make it better you are seeing how you cut the tax rate corporate income tax rates on big companies the tax rate was cut so when we see that this situation is so naive as Satyak Ji just said precarity of empire this is dead and about this you should move on to our discussion first the first question is about women's status the broader topic we are talking about as Satyak Ji just said the way we look at everyday life in some things it seems that everyday life is big like in women's status our country has been having this problem that all women in labour force who are counting all the women in the form of work are suffering the data shows that more women are in work but as Satyak Ji said where are the women who are being shown that they are not working most of the time in that category we say unpaid helper in household enterprise means the work of house can be done without any delay we are seeing that this is not the first 2004 survey even then when we saw that there was a drought for 2 years and women's labour force increased even then this is a distress driven employment means in our country unemployment unemployment is always less because people cannot live without earning people are not like we have unemployment benefits or people have so much savings in those days people have to do something to survive so when this kind of distress comes the employment is a kind of distress employment like women have to leave the house even if they are not getting a basic income like in urban areas we will get many examples domestic work women's work on one side there was a lot of impact on this sector because of the lockdown people stopped keeping workers on the other side we see that many women who used to live at home or did not do such work now because there is a drought in the house they are ready to do such work so they have come out it is visible in these areas the second area if we look at the situation of women even there the situation is not good and the example I want to give you is the health sector in the health sector 50% of the employees are not doctors nurses, technicians all these are and there are more women in this along with this if we connect women like Asha worker, Anganwadi worker they were working during this pandemic so there were a lot of women who were working and taking risks but even their payment if we look at it, it is very less and I am talking about the payment to relate to your second question on the spending on one side, it has come out very clearly that the unemployment is increasing in the sense that people are working as Shorojit said they are not getting any money they are working but zero unemployment or you are working in such areas where unemployment is very low or you are not getting as much employment as you were getting and in the case of women it is more intensive when this situation is what we have talked about on the other side what it means that there is no power there is no power and whatever loan you give any business will invest only when it will feel that there is someone to buy and the small industries, business there is a small shop or a small toy shop where are they getting demand what are they seeing they are seeing that people are going back to the village they are not getting any work and they are not ready to buy anything so the entire MSME to give credit cheats to the street vendor to give 10,000 rupees all these things are very limited if demand is not increased and in such a situation how can demand be increased only then it can be increased if the government spends and why is that because the government is like the government can also spend if any family or any person you can not spend a lot of money but the government can do it and when the government spends in such a situation and the government will get more if the government does not spend if there is no economic activity then the government will also spend but the government spending that can be two ways one is to reduce the earning the government is doing the corporate the big people if you reduce their tax then your earning will be reduced but by reducing their tax there will be no economic activity because the people who spend like if you save 1 crore then it is not very beneficial because 1 crore does not do that but if you if you work in our country if you increase their income by 2000 a month and you make 6000 rupees a month then you will get 4000 rupees if you do that they will spend on their food on their children's education on clothes on small things so it is important to spend and as we have seen it was said that 10% of GDP is spent but the latest data of IMF shows that 3.5% of GDP is what the spending has been in the covid response and this is on the lower side when you compare with other countries it is below the average of emerging market economies as far as the fiscal spending goes then the spending is less and the spending which should be spent on the right things is not much when the money will go in the hands of the poor when we are talking about the workers of this area when the money will go in their hands then the income will increase and a revival can happen in this if we look at the spending of the Prime Minister and the poor but we should also know that it is not more than 1% of GDP but also there has been a time if the record is true then it is on food drain stocks during the Mahamari more than 80 million tons of food drain has been in the FCI go down so if this is not distributed in fact there is a lot more who do not have a ration card they should also have it but in other things in the area of education in the area of health in the area of water, cleaning in all these areas the spending in real terms in the Mahamari the spending is less and if we do all this then we think when the government spends on the environment spends on the health then in the village or in the cities which are working in the area which are Asha and Ammanwadi the teachers friends such people are given money which they spend which they do not spend on money which can increase the entire economy and also with this spending there is a lot more benefit education will increase health will increase all these things are good for the economy moving forward I just want to give two or three points before closing that if we give the budget of this year the budget that came in February there was a lot of hope that the budget is coming in the middle of the Mahamari so with this the budget will increase headline news was made that on health 29% 139% increase in health budget when we have seen the details the big part which was showing the increase in health budget was in the name of Mission Jal Shakti and this scheme was that water will reach every house now I was checking how much was spent in September half a year is over 50% should be spent all the budget allocated for that only 25% is spent you take the budget of education the budget of education only 1% is spent means the budget is less above that the spending all the allocated is not spent last point is that in the beginning what the different ministries are saying there was one recovery was done well spending was not done and dbt was given targeted what dbt was given after the second wave no one was given money even asha vartar nurses who gave the incentive last year were not given last year how much we remember and we thought how much difference will be made last year in the name of dbt in the name of corona 500 rupees was to be given to jandan account means 1500 which has been going on since 1 year and the pension which is given to elderly people and disabled people and single women gave them 1000 rupees that's it the other PM was not given 6000 rupees the whole thing is being said that dbt was done and people benefited from it it is not right it was very less intervention and once in May last year after that dbt was not done only one effective program is being done which is being done which is being distributed but it is also less because there are many people who do not have ration card so I think this whole thing of targeted spending is also something that we have to look at the numbers at and overall like the other set the response has been really lacking because it has been a supply side response whereas the problem is a demand side thank you thank you let me bring in the let's start the third section and I will have a brief fourth section in view of some of the questions that have come in I am going to ask both to elaborate on some of the points that have been already made one is that far from increasing spending the government has continued to try and find supply side solutions to essentially demand side products and continues to do so what we are seeing is that we are following the same old neoliberal policies followed in the past so have we learned any lessons and if we haven't learned have we acknowledged the structural fault lines in the Indian economy I mean are we trying to address the fundamental questions regarding the question of precarity of living poor spending on healthcare on education and you know essentially how the situation has deteriorated in the recent past especially the last year and a half I like you to weave into your reaction three questions that have come from the audience and the first one is by Namritan I am sorry if I am not pronouncing your name correctly how do you invest to create jobs? Very fundamental basic question then Damle has pointed out that despite the failure of the macro fundamentals certain businesses have reported higher profit or have been able to survive have been able to show some profitability even if their margins have shrunk so the question that would naturally arise is that what now what are the kinds of fiscal policies that need to be followed in order to neutralize this base effect as the question is asking especially on the new threat that is being perceived of the new variant of the Covid virus the Omicron and the third question which has also come from Jofin Mathai and he is linked what is happening in India what is happening in the world and his question is how does the imperative for meaningful recovery and the nature of sector sector wise recovery relate to the demands of global competitiveness and what are the kinds of the demands that are being placed on India in the global scheme of things and those who continue to support the need for a free market economic system so these are some questions three questions have come there is a fourth question that has come from Bharath Raju and so the fourth and the last part we look a little bit at the political economy of the problem so let me start with you Surajit I don't know whether I would be able to do justice to all the questions or not but let me begin by what Deepa was talking about and you asked one question that why the government is not spending in India the total government expenditure including central government and state government and the local bodies is around 26% of GDP out of this expenditure around 55% of the total expenditure is spent by the state governments and local bodies I mean local bodies spend very less but basically and central government spends only 45% I mean less than 50% of the total expenditure now the situation is that there has been huge revenue shortfall because of this revenue shortfall expenditure although expenditure has not gone up as a proportion of GDP in fact it has come down as a proportion of GDP little bit in the last budget which Deepa was mentioning in February it has been released that shows the revised estimate of the year 2020-21 which shows the fiscal deficit would be something around 9.5% more than 9% of GDP for the central government alone state government figures are yet to come but including for the state governments also the fiscal deficit would be more than 4% of GDP because GDP has shrunk so the denominator has become smaller and given any numerator if denominator shrinks then the ratio goes up so that way combining central and state government fiscal deficit of 2020-21 is likely to be more than 14% of GDP which is quite high now the government is that is why probably government is showing some kind of desperation for selling all these public sector units in spite of lot of protests and oppositions I mean they need some money to finance this huge large fiscal deficit and they have no clue how to do it so this is the crux of the problem which I think the public I mean the government economics are facing now here Deepa was arguing and quite rightly I completely agree with her that there are two options one that since you have less revenue you spend less and the recovery would be slower and future revenue streams would also suffer so future expenditures would also be less and as a result of that the recovery would be even slower the other option is that you incur larger fiscal deficit as a proportion of GDP today go for expansionary fiscal policy give a boost to the economy inject extra demand as per the requirement I mean let the recovery take place as soon as possible your future revenue stream will be I mean stronger and as a result of that your future in future the fiscal deficit as a proportion of GDP would all automatically come down so I think the second option is better and that is why probably demand side economists have to be given a patient hearing and how to finance this huge fiscal deficit my suggestion is that I was just checking the RBI website as on 5th November the stock of foreign exchange reserve with the reserve bank of India is 640 billion dollars which is equivalent to 47 lakh crore rupees which is around 24 percent of our GDP which has already been monetized while accumulating this stock in order to maintain this exchange rate or in order to manage the exchange rate the RBI while accumulating this huge stock of foreign exchange they supplied domestic currency while buying this foreign exchange from the foreign exchange market so it is already monetized it is sitting idle in reserve bank of India the average rate of return on this huge stock of foreign exchange reserve 24 percent of GDP amount of foreign exchange reserve is merely less than 2 percent is little above 1 percent per annum is the rate of return so government can always use part of this money or government can always borrow part of this money from the reserve bank of India and pay reserve bank of India some 2 percent interest rate at a discounted rate and they can spend liberally under this crisis in order to ensure faster recovery and also since the according to our constitutional arrangement since the larger expenditure responsibilities are lying with the state governments enough money should be transferred to the state governments so that they are enabled to spend liberally I mean as opposed to that what we are witnessing is the central government because of its revenue shortfall it is not in a position to pay the states this GST compensation as a result of already GST revenue has fallen because of less consumption and less income of people less purchasing power of people as a result of that state governments are also facing huge revenue shortfall and lower transfer than before including this GST compensation transfer so state finance is also in extremely tight situation they are not in a position all major subjects social sector particularly health agriculture everything is state subject there could be one or two central sector schemes but 80 to 90 percent of the expenditures on these sectors are spent by the state governments not by the central governments so state governments have to be given more powers spending capacity in order to ensure I mean faster recovery as well as in order to address this humanitarian crisis that we are you know experiencing today and okay sorry and regarding these questions I think you know how to create jobs how to reach near full employment situation etc even before pandemic in 2019-20 the growth rate of our manufacturing sector was negative the investment the growth rate of investment in constant price was negative and the overall GDP growth rate was coming down honestly it reached below around 4 percent GVA was growth rate was 3.8 percent if I remember correctly and the GDP growth rate was around 4.2 percent overall so that was decelerating credit deposit ratio was continuously falling investment GDP ratio in the economy was falling so there was overall demand depressing situation under a demand constraint situation if you have unemployment and centralized capacity in the economy then you have to inject demand through expansionary fiscal policy in order to reach full if not full employment at least near full employment situation and free market economy and global integration I think until and unless some major change takes place this is the rule of the game and no economy in today's world can be completely you know delinked with the rest of the world so we have to remain integrated we have to and it is not a planned economy of course the role of planning has been undermined but I and the lacuna is quite visible quite obvious so the role of planning is extremely important but at the same time it is a mixed economy our government expenditure to GDP ratio is only one fourth as compared to let's say European countries where the government expenditure to GDP ratio is almost half 45 to 50% so the presence of government in this part of the world is extremely lower compared to the developed Europe etc and we have to depend 75% of our rest of the economy is basically non-government in that sense private you may say so it's a mixed economy and here we have to I mean the planning should be not only the government expenditures but also the how to divert private investment in strategic manner so that where employment more employment in our labour intensive sectors get more growth so that the existing labour force gets absorbed and we can reach to if not full employment at least near full employment situation or at least we can reduce the unemployment rate because if I agree MG energy under crisis can give the minimum wage that is also not minimum wage 202 rupees our minimum wage is 350 rupees per day per head in agricultural labourers it is even much lower than that but whatever I mean it is for it is almost like unemployment benefit but this is not meaningful employment in any manner so to create more jobs more meaningful employment we have to under the market mixed economy we have to have that kind of planning so that profitable opportunity is created not only for the big business men and you know as half the kid was pointing out some favoured industrialists but in general in the economy for all small medium scale entrepreneurs and also self-employed everybody so that the economy can grow the investment becomes profitable and the employment gets generated thank you so much I'm going to get back to you after a little while with a few brief comments and our closing remarks but let me first ask Professor Shathuki Roy to elaborate on some of the points that have been made by Surajit and maybe you would also like to talk a little bit about the question that was raised by Prof. Muthai you know what is happening in India what's happening in the rest of the world and I must tell you Surajit I think the question will be able to tell you but I think you did do a good job in responding to the questions that were raised please over to you now Prof. Shathuki Roy thank you regarding the first question I think Surajit has adequately elaborated what needs to be done and also earlier Deepa has explained that why do we need an expansionary fiscal policy demand kind of response rather than resorting to supply side responses but one thing I would say particularly that this is basically a position where we believe that if you give loans you give tax offs to corporates they would invest more this is basically assuming that a private capitalist is basically committed to increase the investment capacity of the economy that is his responsibility and if you give tax offs or you give certain subsidies then the corporate would invest more but as I said earlier it has not happened it is not going to happen because primarily any private capitalist of course invests money to get more profit rather than taking the responsibility of increasing the investment level of the economy as a whole to resolve the macroeconomic problem what needs to be done by the state which basically tries to function as a kind of a collective concern for the economy as a whole they should take the responsibility to increase investment in sectors like infrastructure, like agriculture like social sector which is much more employment intensive and as both Surajit and Deepa has mentioned that there should be a direct injection of money which can increase demand immediately when the economy is basically slowing down in an abnormal situation I would more focus on the second question which is basically that how we vis-a-vis the global market and the competitiveness of Indian industries in a situation of recovery how do we see that first of all I would say that in countries like India which is low medium country according to the World Bank categorization also and their studies have suggested that most of the developing countries they basically grow their industries on the basis of domestic demand and their growth of industries depend upon global competitiveness so relying more on exports relying more on global production network as it is often been advocated that is not also the trajectory that India should take I am not saying that I am against any kind of exports of global integration but that cannot be the main focus of our industrial growth and recovery because first of all even before the pandemic there was a tendency of rebalancing of growth particularly in major economies after the lockdown now the question is as we know that deglobalization is becoming one of the trends where everyone is trying to restore their economy rather than providing demand to other economies so the possibility of relying on exports and on the basis that you try to recover that scenario is I don't think is very very exciting the other thing regarding integration to global production network because many people argue that when you are globally integrated better rely on labor intensive industries which create more employment and if you can get integrated with the global production network then you can increase your employment and also enhance your employment and also I would say that that has not happened neither in case of India nor in any of the developing countries in the recent period because if you see in case of India what has happened the major investments that have taken place by the foreign players are not in sectors like garments, leather footwear, furniture these are not the sector where investment has been made actually the major integration has taken place basically chemicals, motor vehicles and you can say transport equipment these are the segments where the major foreign investment has taken place and the reason being that in advanced economies when you have enough supply of capital because of the financialization where the elasticity of substitution is relatively high but easily substitute labor by capital most of the industries went for capital intensive technology it is only those segments where the substitution level is low or the possibility of substitution labor by capital is low these are the industries which are relocated in the developing economies and those industries are labor intensive according to advanced economic standards but they are capital intensive according to Indian standards so even if some investment came in this segment it is not the sectors which generated enough employment as it was expected so what I would briefly say that of course we need to see what possibilities are there to enhance our export but we cannot rely on exports and global production network as the policy focus in order to recover our economy what we have to essentially do is to increase domestic demand increase our capabilities and more you can increase your share in the global market also depending upon how complex commodities you are able to produce we are still relying on primary commodities some exports have increased their share and increase in case of light engineering but largely it is basically primary commodities on which we are relying so even if we think of recovery with global integration and increase our competitiveness we are far behind what is required even to become competitive in labour intensive segments as well here I stop Thank you, thank you so much Professor Shatraki Roy I think our questioners should be satisfied with the responses Deepaji I came to you and with you this on one topic which Dhyapak Shatraki Ji and Surajee Ji do not know on this topic you should take our last part on our Chacha we want to bring a little politics in it and we will take your opinion this is after Manrega Mahatma Gandhi who is a government worker who is a guarantee program do you remember Raman Ji Narendra Modi after coming to Satya after that he said in our Lok Sabha that this Manrega was the failure of the Congress he said today we are seeing how after this after the 8th election how which government this Manrega is doing more and the money is doing more and the money is saying more so from here Surajee Ji and Sati Ji who said on this topic if you want to say anything do say thank you so first as you said it is a monument to previous government's failure that has been one of the saviours of the pandemic period and we saw that last year one lakh ten thousand crore rupees was spent which is very good in fact there was more demand there was a lot of wages which was given this year and the budget for this year is also over but there is more demand which shows the same thing which we are talking about which we can reduce which is very and Manrega kind of programs are very good in this regard to spend on like Surajee Ji also talked about in fact we should even be thinking about urban employment space one of the things that the pandemic exposed is the precarity of the urban labour as well and the urban poor and we don't have any employment programs for urban poor we don't have a employment scheme either so one kind of program which is very good to invest in in times like this is the Manrega which creates work and therefore creates demand at the same time it creates some assets in rural areas and so on one program which I tried to close this government when I tried to replace it with cash transfers that was the other program that has really delivered in these last two years we are going much more into details as everyone is saying that right now the lack of demand needs to be spent to fix that since we are kind of wrapping up and talking about what needs to be done I would like to say that this something that everybody has been kind of pointing at that the kind of policy we are seeing is not new due to the pandemic but the hope is that from the last 20-30 years we are going to think about what is going to happen and try to fix our path that is not going to happen so the neoliberal kind of policies completely free market oriented which are biased towards finance capital which is something we have been seeing across the world continues post the pandemic as well whereas the pandemic and the crisis that it has brought in should actually be seen as an opportunity to question the very basis of this kind of an economic model and people have been talking about a new deal which is not just a green new deal but a multicolored new deal many people have been writing about a rainbow new deal that we will go ahead then we will rethink the whole thing so that it will be environmentally friendly that it takes care of water issues issues of carbon emission issues of inequality inequality between classes inequality between rural and urban between men and women who are the left out groups who are the marginalized communities Dalits, Adivasis in our country their access to resources that all these questions which we do not raise in the center what kind of an economic model it will be where there is inequality where there is climate change taken into concern and the last issue which I spoke about earlier also the whole issue of the care economy Swasthi, Siksha we have an ageing population so soon we will need care of old people these are again sectors which are labour intensive so there are of course labour intensive manufacturing which is manufacturing you will always have a human element in your care which can create jobs so I really in terms of looking forward would be to question the entire basis of our economic policy and think of how do we rethink this Thank you Thank you so much Deepa ji you have touched on a number of issues and they are very very important for the elderly and we should do a lot of things you have brought the climate change i.e. the climate change and the problem of the environment which we were seeing and we saw during the lockdown how it affected the environment and how it affected the lockdown and this is the last and final part of our discussion and I will request all the three speakers to give very brief and concise remarks and let these also be your closing remarks I first want to tell you that one Mr. Vishal Bhatnagar who is known to me has complimented you you have been very knowledgeable and Prof. Shoraji Das in particular your statistics were eye-opening for Vishal Bhatnagar let me here bring in the comment that was made by Bharat Raju and we move a little bit into the economy of our crisis he says Mr. Narendra Modi Prime Minister is moving inch by inch towards the Congress Muktharath but he certainly as he points out not talking anymore about the 5 Trillion US Dollar Economy just as he is not talking about not Vandhi you know so there is a speaker a question unemployment rate is very high what are the chances some job vacancies in the coming year this is a concern we see everywhere at the same time we have seen certain kind of a gut reaction happening the Bharat Janata Party does badly in the Bipoles suddenly petrol prices come down diesel prices come down on Guru Nanak Dev's birth anniversary the Prime Minister decide that now they are abrogating the three controversial farm laws and then that too he says because of his failure to explain to a section of the agitating farmers the real intent behind the report he is not saying that the laws were wrong but as we talk those laws have been abrogated there was no discussion in parliament on the subject so I'd like all three of you to give your closing remarks and let me just reverse the order Deepa ji, I am starting from you after this I will go to Sati ji and after that I will go to Suraj ji in your association what you have to say we have less time let me take your closing remarks now it's a very complex question that you have asked I think I will just in fact reverse the question of it and say what you have said and we have been talking about the facts for 2 hours and I think there is not much debate everyone can see it particularly after the pandemic unemployment is increasing there was a video just 2 days back I think in Gujarat there was a clerk's position and so many thousands of people came and this has also become a regular feature in various parts of the country and there are many vacancies in government jobs and so on I think it is the responsibility but of course there is the whole political question of how is it that the present dispensation continues to get the kind of supported dust maybe we should also look into asking whose responsibility it is to keep these issues alive demonetization per a bath kyuni huti GSP per bath kyuni huti mahamari par bhi baat nahi ho raha how we forgotten the first wave the issues with the oxygen supply the issues with the hospital beds we need to continue I think the questioning is not happening as much as it needs to these kind of programs are of course useful but we need much much more of putting out the data putting out the information it is an information age so more missing will cool here and of course in this again we can talk about the political economy the media and so on but I would like to say as far as the political context Roy if you can give your brief comments and these are your closing remarks on what we have discussed and on the political economy or what's been going on some of your comments on some of the observations please see what I would say first of all that neoliberalism faces a kind of a conflict in the sense that most of it is not about India but most of the other countries who are pursuing these kind of policies the policies their results are basically hurting the larger section of the population and you are basically adhering to such policies which reduces the real income of the poor as we discussed earlier the real earnings of the regular salary workers that has declined by 7.6% and for self employed people it has declined by 26.4% so there is a sharp decline in the real earnings of the larger section of the population the problem is that the governments need votes of people in order to be elected they can't be elected by multinational corporations or only by Ambanis, Adhanis or the big corporates who actually benefited in this whole process whose wealth have increased by 35% during this period of time so they are supposed to respond beyond the point to at least resolve some of the issues otherwise their political position becomes destabilized so one may think that because of the farmers' protest and other kinds of responses that people are on the streets and so there was some response on the part of the government but during this period we see also that many of the governments have turned to more authoritarian policies we should not forget that during this period of lockdown we see that the labor reforms deal was passed in the parliament which actually increases the provision of working hours for workers as well as the provisions excludes a part of the workers from the minimum wage provisions and things like that this is also the period when CAA was actually tried to be pushed forward so what I am saying that the government is trying to it is not about India only in several parts of the world when people are facing a crisis they are trying to balance these protests and these reactions in two ways one is take resort to more authoritarian kind of stances to reduce policies which actually reduce the rights of people which were earlier existing and on the other hand also try to respond to some of the demands of the people otherwise the political establishment faces destabilization so here I will stop. Thank you so much, thank you so much Professor Sharptopi Roy let's have your closing remarks Professor Surya Jigdash Yes I think I mean we spend Deepa was probably mentioning that including water supply and sanitation on health our total government expenditure is 1.3% of GDP including central government and state government expenditure and excluding water supply and sanitation it would be less than 1% of GDP which is a matter of shame I have looked at the world data there would be hardly 10 countries in the world where government expenditure the highest proportion of GDP on health is lower than that and our out of pocket expenditure on health is one of the highest in the whole world so I mean I think in national common minimum program in 2004 we discussed of increasing the health expenditure to 3% of GDP and so on but it was then also it was less than 1% now also it is less than 1% so this has to be increased substantially immediately in my opinion and it has got lot of multiplier effects that if government spends more money on health then out of pocket expenditure would come down it's like social wage and also automatic targeting would take place because poorer section of population abhills government health facilities absolute need of the hour given this pandemic situation and health crisis in the country now it is not only health even MG NREGS this employment of last resort program as Deepa was mentioning it must be expanded to the urban areas as well because urban unemployment has actually gone up both rural and urban have gone up but urban unemployment has increased at a higher rate of industrial unemployment I mean from whatever little data that we have got till now that shows that so urban employment guarantee scheme is absolute need of the hour and the wage rate under this also should be enhanced to the at least minimum wage rate of the agricultural laborer in the rural areas and industrial workers in the urban areas which are roughly 350 rupees per day and 450 rupees per day from 202 rupees which is the present average wage rate under MG NREGS so these are absolutely essential immediate need now we know that social sector gaps are huge in this part of the world if we have to increase the expenditure government expenditure substantially in these capital expenditure of government is also very low in this country that also has to be enhanced when private investment is not adequate in order to absorb the existing labor force then government investment has to complement it in order to ensure near full employment situation that also has to be enhanced so if we have to enhance all these things then we need more tax revenue also now here comes the question sorry yes please I request you to quickly conclude your comments yeah maybe within one minute so yeah so tax GDP ratio has to be enhanced which is extremely low our combined tax GDP ratio is just 16 to 17 percent of GDP so if it has to be increased our tax rates by the way both direct tax rates as well as indirect tax rates are not low in international standard therefore in order to increase this tax revenue of course our tax base is low but there is a major scope of enhancing the tax compliance by increasing the tax information network of the government by increasing the efficiency of tax collecting authority and by reducing the degree of corruption so these three are absolutely important and one more thing since inequality is very high Deepa and Saptavina both were telling I think it is extremely important to have some kind of wealth tax for the super-rich maybe after the exemption limit of 100 crore rupees those who owns wealth more than 100 crore rupees there should be some tax at some minimum tax rate on that wealth and also property inheritance tax that is absolutely not there in our country but it is there in almost all entire developed world and it is absolutely I think justified to have some tax again after fairly large exemption limit for those who are really rich their sons and daughters would inherit the property absolutely free of cost without paying a single penny to the government in this kind of glaring inequality situation of glaring inequality is probably not fair so I would argue for these things in order to enhance tax revenue which would increase the fiscal space of government to spend more money on the social sector particularly where the areas where it is required like health and employment and so on. Thank you. Thank you so much. Sorry to cut you off we are kind of about 4 minutes above our time limit. I don't want to even attempt to summarize this discussion which has been very wide ranging very very interesting. I would urge everybody who's been hearing it and hearing the program and hearing the three of you talk please share it widely on the social media because I think this kind of discussion often does not take place in much of the mainstream media. I also want to alert you that there are three more discussions that are going to take place on Friday the 3rd of December Monday the 6th of December and Friday the 10th of December at the same time as today that is 3 pm to 5 pm. Let me thank once again Professor Shuruji Das, Professor Shataki Roy, Professor Deepa Sinha and on behalf of I mean I thank the CFA, the centre of financial accountability on Iban and Ashish in particular and also Surandya of Newsclake for putting together this discussion. Thank you very much. This is Poranjoy Guhatakurtha signing off. Have a good evening. Thank you.