Best of BS Opinion: A sobering set of data reveals India's infirmities

From low workers' wages to suspect GDP to scary rankings for pilot training schools to self-serving protectionism, today's pieces paint a sobering picture of what ails India economy and policy

Hello and welcome to Best of BS Opinion, our daily wrap of Business Standard's opinion page.

  India's factory profits for fiscal year 2023-24 have once again outpaced workers' wages, while labour productivity gains and the share of formal manufacturing as a share of GDP have also slipped. All of these data points, notes our first editorial, underline a persistent problem: limited access to stable, high-quality jobs, which impacts both worker income and consumption demand. Technological advances threaten to exacerbate the issue. India also has to deal with another problem: labour laws intended to protect workers have unintentionally ended up pushing factories to hire contract workers, who have lower wages and even fewer rights. Sustaining higher demand in the long term will be tough without first creating well-paying, low-skill jobs in labour-intensive sectors. 

 

The first ranking of registered flying training organisations (FTO) in India by the aviation regulator threw up some shocking results: none of them made it to the top two grades, the rest finished somewhere closer to the middle or the bottom. Disturbingly, says our second editorial, most of them are average or just above-average, a sobering thought at a time when the aviation sector is expected to five-fold expansion in the hiring of commercial pilots over 15 years. The key issue, according to the DGCA is the lack of training infrastructure and lax safety standards, despite these FTOs charging an arm and a leg for basic training, with extra charges for specific aircraft. The rankings come as a wake-up call for the regulator, and more importantly, for those looking for a career in the skies.

 

Our columnist Laveesh Bhandari wonders about the state of manufacturing in India, given that government feels the need to protect hundreds of domestic goods from anti-dumping. He raises the pertinent question of why Indian goods need protection, including non-tariff measures and quality control orders, among others, and what happened to Indian manufacturing and how it can be fixed. An even bigger question is how to decide which items are deemed to be dumped, and which are to be allowed, even if with some tariff measures? The government needs to find a middle path that enables greater competitive forces within the country while creating a fair economic environment. The fear of foreign products is little more than a tool for those who want protection for their self serving interests. The government must not give in to such forces. 

 

At 7.8 per cent growth, India's GDP growth was on a trot in the first quarter of financial year 2025-26. However,  Ashish Kumar and Payal Seth caution that these numbers may not fully capture the true state of the economy, given that the informal sector, which employs over 90 per cent of India’s workforce and accounts for nearly half of the national GDP, is not properly measured, risking estimates as well as policy measures. To change this, they recommend a ground-up approach from the district level, which would yield more reliable GSDP and a GDP that captures India’s true economic structure. Uttar Pradesh piloted the idea in four districts, throwing up surprising differences in data between top-down and bottom-up approaches. If all states were to adopt this model, India could build a truly representative GDP that reflects the depth and diversity of its economy.

 

Subhomoy Bhattacharjee rues the lack of Indian authors who go into the specifics of a particular policy, bar a few on foreign affairs, including one by the current external affairs minister S Jaishankar. Thus, it falls to overseas experts to fill the gap. One of those is 'ITEC at 60: India’s International Development Partnerships' by Shimreisa Chahongnao, Maria Elizabeth Joseph and Swati Sinha of Ananta Aspen Centre. The authors, he writes, have made a brave attempt to understand a key piece of Indian policy - Indian Technical and Economic Cooperation - and how it has tried to aid a large band of nations in the so-called Global South since 1964. As a results, generations of Indian leaders pass through the pages of this book. The only regrettable miss is that the authors did not consider adding colour to by bringing these leaders to life through their words.