Push self-employment, not inclusive agenda, says report

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New Delhi, Sep 21: The Indian growth story is throwing up more and more surprises. The utterly poor have improved their life chances just as the tony set has in the past decade. That’s not all. The politics of quotas and rural employment guarantees, pushed by the UPA government, actually accentuated inequality instead of removing it.

A new study on income inequalities in India says average incomes have risen sharply for the bottom 20% of the population by nearly 10% in rural and urban areas, between 1993-94 and 2004-05. This compares well with the almost 12% rise in income for the top 20% of the population in the same period.

The section of the population that may be facing more sluggish growth in income is the intervening strata, comprising employees in clerical jobs or those with fixed income living in towns. Their chances of getting highly skilled jobs with prospects of a sharp rise in salary are quite low.

The study, entitled ‘Exclusive Growth—Inclusive Inequality’, by Bibek Debroy and Laveesh Bhandari conducted for the Centre for Policy Research, Delhi, concludes therefore that the self-employed have a better chance of improving their lot.

Calling for a policy push for self-employment, the paper says the inclusive growth agenda of the United Progressive Alliance government is flawed. “There is an attempt to cast everything into an employer-employee mould, be it through the national rural employment guarantee, reservations or social security legislations,” it says.

The paper has used data thrown up by the government’s own NSSO and other agencies. It says from a growth and employment perspective, self-employment needs to be promoted through an agenda that includes provision of physical infrastructure like roads and power. This has to be supplemented by social infrastructure, including education, skills and healthcare. At every stage, the authors say, differences in income are related to education skills for every population strata.