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150 Words10 Marks
Q.Besides the welfare schemes, India needs deft management of inflation and unemployment to serve the poor and the underprivileged sections of society. Discuss.
UPSC Mains 2022•Governance
Model Answer
View this Question In PYQ RealmIntroduction
As a developing country with significant socio-economic disparities, India is constitutionally mandated (under Articles 15, 38, 46, and 47) to promote the welfare of its underprivileged citizens. While targeted welfare schemes are essential, sustainable poverty alleviation requires robust macroeconomic management, specifically controlling inflation and generating stable employment.
Body Analysis
Role of Welfare Schemes
The Government of India has launched several critical welfare programs, such as:
- Pradhan Mantri Jan Dhan Yojana (PMJDY): Ensuring financial inclusion and banking access.
- Pradhan Mantri Mudra Yojana (PMMY): Providing collateral-free loans up to ₹10 lakhs to micro-entrepreneurs.
- Pradhan Mantri Ujjwala Yojana (PMUY): Delivering clean cooking fuel (LPG) to BPL households.
- National Social Assistance Programme (NSAP): Offering pension support to the elderly, widows, and disabled.
- MGNREGS: Guaranteeing wage employment in rural areas.
The Critical Need for Inflation Management
- Erosion of Real Income: High inflation acts as a regressive tax, disproportionately hurting the poor by eroding their purchasing power. Even with food subsidies, rising costs of healthcare, education, and fuel can push vulnerable families back into poverty.
- Impact on Welfare Budgets: Inflation increases the cost of implementing welfare schemes, reducing the real value of cash transfers (like NSAP pensions) unless they are indexed to inflation.
The Critical Need for Unemployment Management
- Breaking the Poverty Cycle: Welfare schemes provide temporary relief, but sustainable upliftment relies on secure, decent-paying jobs.
- Demographic Dividend: India must leverage its young workforce by aligning skill development with market demands, reducing underemployment, and formalizing the informal sector.
Synergizing Welfare with Macroeconomic Stability
- Managing inflation stabilizes the cost of living, ensuring that welfare benefits retain their purchasing power.
- Promoting employment reduces the fiscal burden on the state for direct welfare support, allowing resources to be redirected toward long-term asset creation (health, education, infrastructure).
Conclusion
Welfare schemes are vital safety nets, but they cannot replace structural economic health. Deftly managing inflation and generating productive employment are indispensable pillars for achieving true, sustainable, and inclusive growth for India's underprivileged.
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