Viksit Bharat’ is Prime Minister Narendra Modi’s latest buzzword aimed at convincing Indians that, despite a decade of slow growth and erratic decision-making, the country is on the right track. But a catchy phrase that tests well in focus groups won’t solve India’s problems. As economies mature, workers typically move away from low-paying agricultural jobs to higher-paying jobs in manufacturing and services. The agricultural sector shrinks as manufacturing and service industries expand. Yet, under Modi, exactly the opposite has happened.
The most recent evidence of this is found in the 2022-23 All India Rural Financial Inclusion Survey released by the National Bank for Agriculture and Rural Development earlier this month. Data shows that the proportion of rural and semi-urban households that were “agricultural” rose from 48 percent in 2016-17 to 57 percent in 2021-22. In other words, more households became dependent on agriculture over these five years.
Now, you might argue that this was just after the Covid-19 pandemic, when many urban workers returned to their homes in rural India. And you would be partly right. The national lockdown announced on the evening of 24 March 2020, giving citizens a four-hour notice, caused a total collapse in urban employment and broke the confidence of working-class migrants who were forced to walk home hundreds of kilometres on foot with their baggage and families. They understandably took some time to recover from this experience.
But keep in mind that the survey was conducted over ten months starting in September 2022, long after the lockdown had ended and the Delta wave had subsided. Moreover, there is substantial evidence that India had begun to de-industrialise long before the pandemic struck. Covid-19 was just the straw that broke the camel’s back.
For 15 years after 2004-05, young workers moved from agriculture to manufacturing and services, as would be expected in an industrialising economy. According to economist Santosh Mehrotra, the number of agricultural workers declined by 6.7 crore between 2004-05 and 2017-18. In the single year of 2019-20—before Covid—the number of workers in agriculture jumped by 3.4 crore. Since 2018-19, the number of farm workers has increased by 6 crore. In other words, Modi has managed to reverse two decades of structural transformation in the Indian labour force.
The government’s own Periodic Labour Force Survey (PLFS) supports this trend. Between 2004-05 and 2018-19, the share of agricultural workers in the workforce fell steadily from 59 percent to 43 percent, with the biggest drop occurring during the UPA—once again, as expected in an industrialising economy. Since then, however, this trend has shifted, with the share of agricultural workers rising to 46 percent in 2023-24. Some have described Modi’s politics as “aspirational”. But who aspires to labour on a farm?
Meanwhile, the proportion of workers in manufacturing has declined to 11 percent in 2023-24, which is not what you would expect if initiatives like ‘Make in India’, ‘Atmanirbhar Bharat,’ and other buzzwords had any real impact.
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Either incompetent or funder-focussed
This situation can be interpreted in two ways. One, that the Modi government is well-meaning but incompetent. It wants India to industrialise—who wouldn’t?—but is unable to do so. More than a decade after the UPA, it has become hollow to blame the previous government or even Jawaharlal Nehru, especially given that the UPA government clearly had a better record on job creation and balanced growth.
The second interpretation is that the Modi government is trapped in a web of nonstop electioneering and a hunger for political funding. Modi came to power with the overt support of big business, and big business wants its pound of flesh. The BJP cannot maintain its information dominance and squeeze the funding of opposition parties without the cooperation of major corporations. The stick—through agencies like the ED, CBI, and Income Tax—will not suffice alone. Modi’s business allies need carrots too, which means a policy stance that channels government funding to them—in the form of major infrastructure contracts, corporate tax cuts, and productivity-linked incentives (PLI)—while offering crumbs to everyone else.
And I don’t mean what Modi has called “revdis”. I mean policies that aim to facilitate the ease of doing business (rather than just improving India’s standing in a questionable index). We need policies that ensure small businesses, which generate 90 percent of manufacturing jobs, can access capital, technology, and markets. People will leave agriculture only when attractive jobs are available that provide a modicum of economic security, which means creating a healthy MSME sector.
On the surface, the Modi government has taken some steps to support small and medium businesses. The Udyam portal seeks to make registrations easy, and budget allocations for the Credit Guarantee Funds Trust for Micro and Small Enterprises have increased to facilitate collateral-free loans for small businesses. Infrastructure development has helped reduce logistical costs and times. Textile parks built under the PM MITRA scheme could help India catch up with Vietnam and Bangladesh, which are eating India’s lunch when it comes to textiles and clothing.
But the focus remains primarily on the big businesses that fund and like to be photographed with Modi (even as they procure foreign residency to hedge their bets). Top-down credit schemes will fail if bankers don’t implement them in tier III and rural areas. Decriminalisation of laws won’t help if local officials are incentivised to seek rents rather than facilitate production. Infrastructure improvements won’t stimulate exports if import duties on essential inputs for MSMEs are raised just because your big business friends are better positioned to lobby for protectionism. And last but not least, if your biggest carrots—a Rs 1.84 lakh crore corporate tax cut and a Rs 1.97 lakh crore PLI—mostly benefit large-scale enterprises, don’t be surprised if small and medium businesses languish.
No one doubts that policies to raise productivity and value addition in agriculture are necessary. But to transform India into an industrial powerhouse capable of competing with China and other Asian competitors, the government must create a pathway for workers stuck in low-paying farm jobs to shift to better-paying jobs in manufacturing and services. Playing the monopolist game for political benefits will not bring us anywhere close to Viksit Bharat.
Amitabh Dubey is a Congress member. He tweets @dubeyamitabh. Views are personal.
(Edited by Prashant)
Sadly, the transition from pursuing Nehru’s model of development, rooted in the bone-tired Western school of thought focused on absolute industrialization since the 1950s, to a less acknowledged yet future-safe Eastern approach to economic development – one that has led countries like Japan, China, Taiwan, South Korea, and many smaller Southeast Asian nations to reach the pinnacle of development – is being misrepresented as an uninformed monopolistic game by the BJP, rather than recognizing it as the majoritarian government of India (NDA).
The editors of The Print seem to be becoming little more than uninformed social media scrollers, aiming for topical notifications while maintaining the illusion of engaging news coverage.
The intent should be to pursue the right solutions rather than settling for generic approaches that merely satisfy short-term goals. A focus on contextually meaningful development that leaves a lasting impact is essential for remaining competitive in the global development race.
Also, because of the Congress party, India is the world’s number one fully industrialised-advanced, free-market economy with AAA credit rating!