Where are the labours? Who is going to run machines? India is going to face a skill problem for its GDP growth. The 2nd wave has created one of the highest income inequalities for India which currently is unexplored but will be having a cascading effect on the economy in the long run. The death has created more loss of income and more leftover pain of significant income inequality. Looking at the banking number of Gold Loan of SBI for Fy-21, we find that it has witnessed a 460% jump in gold loan. Well, the cumulative jump from the BFSI segment will be beyond 1000%. This number belongs to 1st wave and in the 2nd the wave we don’t how much gold have been pledged to buy oxygen cylinder, medicines from black-market and how to much to pay a bribe to get an oxygen ventilator bed. The unorganised loan market of pledging is still not accounted and further how many assets like house, land, business, shops have been pledged for getting few more hours to breathe.
We have been hearing that rural India is impacted significantly due to covid since the medical healthcare system is so weak. Well, the weakness is being compensated by selling assets so that better facility can be achieved in urban hospitals. Rural India has been impacted severely and this impact still remains unexplored in terms of correct numbers. We still don’t know how many children have lost their both parents and how many have lost their sole bread earner who used to pay the school fees. This segment of society is going to face one of the hardest brutalities of income inequality.
We will be getting more child labours and more crimes in a society where the fight for income inequality gets intensified. Indian economy may not face a shortage of labours but yes skilled labours crisis might be faced. Covid-19 2nd wave death has destroyed the middle class and below the middle class completely. The unemployed numbers of rural and urban are way above 25%. Well, the unskilled labour crisis is more since the skilled will get more job. The below numbers of the unemployment speaks loudly that it will take more than 2 years to get back to the pre-covid phase of salary and job growth. The stock market does not reflect the true story of the economy. The irony of life is that cost reduction at the cost of human labour boost profitability and increases shareholders wealth but does not bring down income inequality gaps.
The state-wise unemployment numbers further speak that how weak these states are in terms of providing better healthcare facility. The income inequality among the middle-class segment will bring a different prolonged mindset of working at lower wage just to survive life. Everyone does not work in a Fortune 500 company hence there is no point in doing any comparison of employment and salary hike numbers with the same.
Low penetration and neglected acceptance of health insurance have created a significant hole not only in the savings but also in the Credit card EMI and personal loan segments. These loans will indulge more assets to go ahead for liquidation just to repay them back. No moratorium can help here.
State-wise unemployment numbers speak that labour management is now going to be major issues and reverse migration probability is very high in these times. Indian economy does not have liquidity problems neither corporate India but labour crisis will teach biog lesson to corporate India for this time. India will need significant focus on skill development so that this income inequality can be bridged. The traditional syllabus of skill development will not be sufficient to create employment. Technology will play a critical role behind the new makeover of the society hence skill also needs to be based on technological advancements. This means that one needs to bring in low cost advanced technological courses and skill development programmes available free of cost to uplift the skill development to match the jobs being created.
Courses like coding, AI, Machine learning needs to be etc needs to be imparted free of cost through the government or PPP model where the CSR funds of the corporate can be used to create the next generation, education model. This model will help these poor families children’s to get this advanced technological knowledge for a better future in India. The fortune 500 companies of India, through the CSR model, can create these infrastructures for skill development. The best part of this model is that corporate real-life advancements are directly imparted through skill development courses to these young futures of India.
Technology is the only way through which this income inequality can be bridged at a much faster rate as compared to the historical roots of skill development. Start-up incubation hubs for this poor and middle-class segment will play a pivotal role in uplifting the Indian economic growth and bridging income inequality. Its high time for India to think and redesign the skill development process and model for pulling India out of this income inequality. You don't need subsidy and LPG connection you need skill development.
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