Can the robust economic growth fulfil even social security?
The Central Statistical Organisation has stated that by the end of the fourth quarter, the Indian economy would clock a growth rate of 8.7% which, going by the last three quarter’s performance, looks achievable. And if that happens, then the Indian economy would be growing by more than 8.6% for the fourth consecutive year. Though most of this growth has been fuelled by the manufacturing and the services sector, with almost negligible contribution from the agriculture, this has been the lacunae of the Indian growth story, for long. As a result of this, the dividends of growth have failed to touch upon a majority of the Indian population, thus creating an unprecedented divide!
In fact both the manufacturing and the services sector had been clocking decent growth over the past decades, with few glitches here and there, particularly with manufacturing. In this financial year, in particular, both the sectors have shown a robust growth, wherein the companies would be posting an average net profit of more than 30%, with the financial year closing. In the given scenario, one of the key challenges that most of the companies are facing is in terms of sustaining such growth levels. And realising that the key to growth lies in constant supply and retention of the talented workforce, the companies are all out to pamper the working class. Starting from whopping salary rises, perks that were completely unheard of till a few years back, bonuses and cash incentives, incentives in kind like marriage allowances, sponsored higher education, ESOPs et al, companies are going all out to pamper the workforce. In fact researches state that currently, for most companies, human costs are the single highest costs that take up the maximum chunk of the top-lines. In certain cases it is as high as 50% to 60% of the toplines. In fact researches also state that the salaries on an average have gone up by a staggering 25% over the past three years, which means that the growth rate in salaries has almost matched the growth in companies top lines. This invariably means that, irrespective of the reasons, the wealth is at least getting proportionately distributed within few section of the working class. This might bring half a smile on the lips of Karl Marx as we get to observe disguised socialism at work, how much ever we may deny it!
But then, Marx would probably never have the opportunity to laugh, as the proportionate distribution of wealth is accruing to a miniscule proportion of workforce – only for those who are engaged in the organised sector. And that too not for everyone in the organised sector but for a select few, leave alone the millions who are employed in the unorganised sector. For those 400 million in the unorganised sector, forget proportionate distribution of wealth, even basic social security is a distant dream as of now. No doubt the phenomenon of proportionate distribution would definitely trickle down on its own, but then it would take decades before it touches upon the entire work force. If the phenomenon has to trickle down real fast, then interventions have to be made at the right levels to create the right talent pool, across the nation. Only then can we go create a sustainable socialist state.
The Central Statistical Organisation has stated that by the end of the fourth quarter, the Indian economy would clock a growth rate of 8.7% which, going by the last three quarter’s performance, looks achievable. And if that happens, then the Indian economy would be growing by more than 8.6% for the fourth consecutive year. Though most of this growth has been fuelled by the manufacturing and the services sector, with almost negligible contribution from the agriculture, this has been the lacunae of the Indian growth story, for long. As a result of this, the dividends of growth have failed to touch upon a majority of the Indian population, thus creating an unprecedented divide!
In fact both the manufacturing and the services sector had been clocking decent growth over the past decades, with few glitches here and there, particularly with manufacturing. In this financial year, in particular, both the sectors have shown a robust growth, wherein the companies would be posting an average net profit of more than 30%, with the financial year closing. In the given scenario, one of the key challenges that most of the companies are facing is in terms of sustaining such growth levels. And realising that the key to growth lies in constant supply and retention of the talented workforce, the companies are all out to pamper the working class. Starting from whopping salary rises, perks that were completely unheard of till a few years back, bonuses and cash incentives, incentives in kind like marriage allowances, sponsored higher education, ESOPs et al, companies are going all out to pamper the workforce. In fact researches state that currently, for most companies, human costs are the single highest costs that take up the maximum chunk of the top-lines. In certain cases it is as high as 50% to 60% of the toplines. In fact researches also state that the salaries on an average have gone up by a staggering 25% over the past three years, which means that the growth rate in salaries has almost matched the growth in companies top lines. This invariably means that, irrespective of the reasons, the wealth is at least getting proportionately distributed within few section of the working class. This might bring half a smile on the lips of Karl Marx as we get to observe disguised socialism at work, how much ever we may deny it!
But then, Marx would probably never have the opportunity to laugh, as the proportionate distribution of wealth is accruing to a miniscule proportion of workforce – only for those who are engaged in the organised sector. And that too not for everyone in the organised sector but for a select few, leave alone the millions who are employed in the unorganised sector. For those 400 million in the unorganised sector, forget proportionate distribution of wealth, even basic social security is a distant dream as of now. No doubt the phenomenon of proportionate distribution would definitely trickle down on its own, but then it would take decades before it touches upon the entire work force. If the phenomenon has to trickle down real fast, then interventions have to be made at the right levels to create the right talent pool, across the nation. Only then can we go create a sustainable socialist state.
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