Abhijit Banerjee and Esther Duflo interview: ‘India’s policy frame is not focused on inequality’

Source: Indian Express

Subject: Economy

Topic: Poverty, Inequality

Issue: Measure of poverty, employability, inequality, health, education

Why in news: Abhijit Banerjee and Esther Duflo, who won the 2019 Nobel Prize in Economics for their work using Randomized Controlled Trials to evaluate social policies

Synopsis:

Key points on poverty in India

• Methodology to measure poverty:
• In the absence of proper data on consumption it is better to use data such as infant mortality, maternal mortality etc. including data from NFHS (National Family Health Survey) to measure poverty.
• Efficacy of government schemes:

• NREGA (National Rural Employment Guarantee Act) is working well as there are good evaluations showing that it worked and that it reduced poverty.
• However the same can not be said about other schemes such as PM Awas Yojana, PM Kishan because it’s not clear who exactly getting them;
• Inequality in India:

• In India while economic inequality might have been limited, there were vast social inequalities through caste and class.
• The current political system is more responsive to social inequalities, but the assessment of overall improvement is complex.
• Other forms of inequality are often overlooked, such as the lack of amenities for poor children, including spaces to play and green areas.
• The shift in power dynamics from rural landlords to urban businessmen adds complexity to the evaluation of whether abuses have increased or decreased.
• Inequality is a mechanism reflecting the lack of social mobility. Access to quality education, especially in the public school system, is crucial for social mobility.
•  Education and employability:

• There is a need to focus relentlessly on the basics and ensure that every child learns these basics.
• Pedagogy plays a crucial role in employability. Traditional, top-down pedagogical approaches that suppress curiosity and critical thinking can have damaging effects on students’ ability to adapt in the workforce.
• Encouraging children to think independently and problem-solve on their own can significantly improve exam pass rates
• Youth’s inclination towards government job:

• The obsession with government jobs in India is counterproductive.
• The focus on preparing for government exams consumes valuable time and hampers employability, as individuals may spend years attempting to secure a government job.
• Employability issues are not just about skills but also about attitudes. Distorted attitudes, particularly the preference for government jobs, contribute to challenges in the workforce.
• Training programs may not yield the desired outcomes if individuals trained for specific jobs continue to prioritize government jobs, leading to a mismatch between skills acquired and job preferences.
• Addressing Expectations for government job

• The government can consider expanding the number of people it employs while offering transitional mechanisms.
• Individuals could take a job, and retention would be based on performance, creating a tenure-like system.
• Rethinking the shape of the government is crucial, with a focus on having more young people in government, allowing them to start their careers, and later transition to other opportunities.
•  Addressing Stunting and Wasting in Children:

• Unlike primary education, there isn’t a single solution to address issues of stunting and wasting in children.

• Experiments, like adding a second ICDS worker focused on nutrition in Tamil Nadu, have shown some positive impact, but they were expensive and not scaled up.
• There is a lack of clear solutions, and more learning is needed in this area. Political consensus exists for scaling up effective interventions if identified.
• Protein consumption in India is remarkably low, contributing to malnutrition issues.
• Lack of awareness about proper nutrition, especially protein consumption, is a challenge.
• Communicating the importance of a balanced diet, including protein-rich foods, is crucial.
• Traditional dietary habits may need to be addressed, and awareness campaigns, similar to a sitcom promoting iron-fortified salt in Bihar, can be effective.
• Resource Allocation for Health and Education:

• India’s budget allocation for health is globally on the low side, emphasizing the need for increased investment in this sector.

• In education, India’s per capita budget allocation is around the median level. The concern lies in the allocation toward elite institutions versus schools, indicating distortions in resource distribution.
• Building institutions for social mobility in education is crucial to address long-term issues and prevent a crisis where a significant portion of the population feels left behind with limited job opportunities.