Can India avoid Middle Income Trap?

Article No. 1
11/May/2019

Recently, Dr. Rathin Roy, member of PM Economic Advisory Council said that India will face Middle Income Trap (MIT) in 5 years. Yes, it’s true, because symptoms of MIT is already ON in the Indian Economy such as Job crisis, lack of availability of efficient candidature for different sectors, lack of productivity, low innovation etc. in the country. Our country has 50% of its population under 25 age 65% is under 35 age. And most importantly the average age of Indian population is around 29 years. Still we failed to efficiently utilise this work force for the economy. Because we failed in two key areas; Productivity and Innovation. Fundamental cause of this problem lies from the perspectives of an individual in the society to parliamentarians in this country. Here, we can discuss this issue in three different ways such as Psychosociological, Political and Economical.



Individual & Society
Here, we have to understand that most important assessment in society is ‘Competition and Comparison’. It can be seen in individual level and family wise. India, as a country we have increased our education level, literacy to Phd and Post-doctoral level. But something that still missing in this process that cause to low productivity and innovation. Competitive exams and aspirants are increasing their competition level, but it does not correlates with the outcome, productivity and innovation. Here, we can discuss about significance of ‘Comparison’ in Psychosociological perspective.

Family is the fundamental unit of a society. Individuals get basic knowledge, wisdom and ideologies from their home itself. In the Indian society, Individuals and families are compelled or motivated to compare oneself with others in the society. It is not only bad idea, but also dangerous to individual and society. This comparison mania and working or studying based on comparison will lead to less good, happy, stable and satisfied individual. Eventually, it results in less productive and low innovative country at large. Here, we have to understand one fundamental thing in life that is instead of comparing ourselves with other, we just compare ourselves with our previous stages in life. It is better to shift our focus from following others to go according to innate abilities and skills we have. If India now works based on each individual’s innate abilities and skills, it will definitely escape Middle Income Trap.

Hard work and quality enhancement programs should be based only on their innate ability and skills not merely on opportunities of others. It is essential to an innovative society not to seek opportunities, but create opportunities. Thus, India can be more productive and innovative.

Comparisons always ruin the actual potential of an individual in a society. In sports, sprinters are generally, practising to improve their previous performance. If sprinters focus on the world record on his practice, he will be less happy and less satisfied. It’s very true in the case of each individual and their career. Selection of career should be based on individual innate abilities and skills, not according to merely based on Common Competitive Exam or just blindly following the opportunities of others. This makes people more happy and satisfied in life.

Competition, low correlation with quality
We have lot of competitive examinations in the country; Engineering-Medical entrance to Civil Service Examinations. It’s interesting to note that mostly toppers in these competitive exams are not top in the people efficiently utilising their efforts, abilities and skills in respective departments. It’s clear that there is a visible problem in these competitive examinations to find out top notch candidates in the country. It must addressed urgently, otherwise, this also lead to less productive and low innovate country. Problems in competitive exam can be addressed only by Parliamentarian and Political system in this country.

Competitive exams can be reformed by structural changes in education as well as recruitment systems. For example, engineering has so many branches from Electronics and Communication Engineering (ECE) to Mechanical Engineering (ME). Both are entirely different in nature of study and practices. It should be mandatory that students to choose a branch must have innate abilities and skills in either ECE or ME. UPSC Civil Service Exam has also same problem that it recruit one exam for around thirty posts. Here, it is evident that Common Competitive Examinations are not finding the excellent people for their innate respective fields.

Competitive Exam Coaching Centres are not essential for enhancing innate abilities and skills of a person. This industry is doing many harm to Indian Society, one. They are spreading unrealistic motivations rather that proper guidance and directions to improve their qualities. Two, mostly middle class people in this country are victims of Coaching Centres. Three, relatively only 20% of the students get advantages of these centres, other 80% fee paying students gets nothing in final analysis. Lastly, they only increase competence not quality to further lead to productivity and innovation. Thus, we need a political will and commitments to reform Competitive Exam systematically to upcoming generations and future of this nation to become more productive and innovative.

Internal Production and Consumption
Indian economy is thriving based not on exports but on internal consumption as said by Dr. Rathin Roy. International economy is still in slow pace. So we have to increase our internal productivity and consumption to large people in this country from merely 100 million people consumption based economy.

Subsidies, Freebies and Free Cash Transfer programs are need to be gradually stopped in a time bound manner. These are make people lazy and less productive. If production is decreased and consumption is increased, eventually it lead to large inflation that harm to everyone this country. Psychologically, free receiving makes people to addict to it. Addiction to anything in life will ruin his happy and satisfied life. Further it shift to violence and corruption. Therefore, political parties are must be more careful before giving promises in a democratic system with long vision.

Union budgetary allocation need more shift towards infrastructure development and educational sectors as well as Research and Development from Subsidies, Freebies and Free Cash Transfer programs. It will help to make people to create more opportunities by enhancing productivity and innovation, which helps India to check Middle Income Trap.

Hopeful
Wherever or whoever people work with enthusiastically, there will be more productivity with growth and development. It is not just limited in the work place, it will extend to family, society and even to nation. Right person at right place for the work will mostly no corruption. Systemic failure in Competitive Exams places wrong people to wrong places. They are not interested or committed in their work, further cause to less efficient in production and service delivery. Good, happy, stable and satisfaction can be developed in family through not comparing yourself with others. These are the basic necessities of a society. Such people can find their own innate abilities and skills. Then, they works more to improve themselves. Political and Economic system need to change to adopt such people to the country to become more productive and innovative. If 65% of Indians under 35 year old decided to work based on their own innate qualities, we can definitely manage The Middle Income Trap. It essential that we need proper direction rather than unrealistic motivation, we need high quality infrastructure to all parts of the country even in remote places rather freebies, we need political will to drive India to proper destination not unfulfilled promises.


By,
Nithin A F
Doing Post Graduation in Psychology
Thiruvanathapuram, Kerala.
Email : nithinaf@gmail.com
11/May/2019

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