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Economic Survey pegs India’s 2021-22 GDP growth at 11%

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Economic Survey 2020-21 tabled

Economy in current fiscal expected to contract by 7.7%

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Srinagar, Jan 29: India’s real GDP to record a growth of 11% in 2021-22 and nominal GDP by 15.4% -the highest since independence, according to Economic Survey 2020-21 tabled by the Union Finance Minister Sitharaman in the Parliament on the first day of the budget session.

The V-shaped economic recovery is supported by the initiation of a mega vaccination drive with hopes of a robust recovery in the services sector and prospects for robust growth in consumption and investment, it said.

The Economic Survey 2020-21 states that the rebound will be led by the low base and continued normalization in economic activities as the rollout of COVID-19 vaccines gathers traction.

The fundamentals of the economy remain strong as gradual scaling back of lockdowns along with the astute support of Atmanirbhar Bharat Mission have placed the economy firmly on the path of revival.

This path would entail a growth in real GDP by 2.4% over the absolute level of 2019-20-implying that the economy would take two years to reach and go past the pre-pandemic level. These projections are in line with IMF estimate of real GDP growth of 11.5% in 2021-22 for India and 6.8% in 2022-23. India is expected to emerge as the fastest growing economy in the next two years as per IMF.

The Survey says, India’s mature policy response to this “once-in-a-century” crisis provides important lessons for democracies to avoid myopic policymaking and demonstrates the significant benefits of focusing on long-term gains.

India adopted a unique four-pillar strategy of containment, fiscal, financial, and long-term structural reforms. Calibrated fiscal and monetary support was provided given the evolving economic situation, cushioning the vulnerable in the lockdown and boosting consumption and investment while unlocking, mindful of fiscal repercussions and entailing debt sustainability. A favourable monetary policy ensured abundant liquidity and immediate relief to debtors via temporary moratoria, while unclogging monetary policy transmission.

The Survey says, India’s GDP is estimated to contract by 7.7% in FY2020-21, composed of a sharp 15.7% decline in the first half and a modest 0.1% fall in the second half. Sector-wise, agriculture has remained the silver lining while contact-based services, manufacturing, construction were hit hardest, and have been recovering steadily. Government consumption and net exports have cushioned the growth from diving further down.

As anticipated, while the lockdown resulted in a 23.9% contraction in GDP in Q1, the recovery has been a V-shaped one as seen in the 7.5% decline in Q2 and the recovery across all key economic indicators. Starting July, a resilient V-shaped recovery is underway, as demonstrated by the recovery in GDP growth in Q2 after the sharp decline in Q1.

As India’s mobility and pandemic trends aligned and improved concomitantly, indicators like E-way bills, rail freight, GST collections and power consumption not only reached pre-pandemic levels but also surpassed previous year levels, it said.

The reignited inter and intrastate movement and record-high monthly GST collections have marked the unlocking of industrial and commercial activity. A sharp rise in commercial paper issuances, easing yields, and sturdy credit growth to MSMEs portend revamped credit flows for enterprises to survive and grow.

Agriculture Green Shoots

Dwelling on the sectoral trends, the Survey says that the year also saw the manufacturing sector’s resilience, rural demand cushioning overall economic activity and structural consumption shifts in booming digital transactions.

It adds that Agriculture is set to cushion the shock of the COVID-19 pandemic on the Indian economy in 2020-21 with a growth of 3.4% in both Q1 and Q2.

A series of progressive reforms undertaken by the government have contributed to nourishing a vibrant agricultural sector, which remains a silver lining to India’s growth story of FY 2020-21.

A palpable V-shaped recovery in industrial production was observed over the year. Manufacturing rebounded and industrial value started to normalize. Indian services sector sustained its recovery from the pandemic driven declines with PMI Services output and new business rising for the third straight month in December.

Bank credit remained subdued in FY 2020-21 amid risk aversion and muted credit appetite. However, credit growth to agriculture and allied activities accelerated to 7.4% in October 2020 from 7.1% in October 2019.

October 2020 saw resilient credit flows to sectors such as construction, trade and hospitality, while bank credit remained muted to the manufacturing sector. Credit growth to the services sector accelerated to 9.5% in October 2020 from 6.5% in October 2019.

High food prices remained a major driver of inflation in 2020. However, inflation in December 2020 fell back into the RBI’s target range of 4+/-2% to reach 4.6% to reach 4.6% year-on-year as compared to 6.9% in November. This was driven by a step fall in food prices, particularly of vegetables, cereals, and protein products and favourable base effects.

The external sector provided an effective cushion to growth with India recording a current account surplus of 3.1% of GDP in the first half of the year, largely supported by strong services exports, and weak demand leading to a sharper contraction in imports (with merchandise imports contracting by 39.7%) than exports (with merchandise exports contracting by 21.2%). Consequently, the Foreign exchange reserves rose to cover 18 months of imports in December 2020.

External debt as a ratio to GDP rose marginally to 21.6% at end-September 2020 from 20.6% at end-March 2020. However, the ratio of foreign exchange reserves to total and short-term debt (original and residual) improved because of the sizable accretion in reserves.

India remained a preferred investment destination in FY 2020-21 with FDI pouring in amidst global asset shifts towards equities and prospects of quicker recovery in emerging economies. Net FPI inflows recorded an all-time monthly high of US$ 9.8 billion in November 2020, as investors’ risk appetite returned, with a renewed search for yield, and US dollar weakened amid global monetary easing and fiscal stimulus packages. India was the only country among emerging markets to receive equity FII inflows in 2020.

Buoyant Sensex and NIFTY resulted in India’s market-capitalisation to Gross Domestic Product (GDP) ratio crossing 100% for the first time since October 2010. This, however, raises concerns on the disconnect between the financial markets and real sector.

Exports are expected to decline by 5.8% and imports by 11.3% in the second half of the year. India is expected to have a Current Account Surplus of 2% of GDP in FY21, a historic high after 17 years.

Gross Value Added growth 

On the supply side, Gross Value Added (GVA) growth is pegged at -7.2% in 2020-21 as against 3.9% in FY:2019-20. Agriculture is set to cushion the shock of the Covid-19 pandemic on the Indian economy in 2020-21 with a growth of 3.4%, while industry and services are estimated to contract by 9.6% and 8.8% during the year.

The Survey underlines that the year 2020 was dominated by the COVID-19 pandemic and the ensuing global economic downturn, the most severe one since the Global Financial Crisis. The lockdowns and social distancing norms brought the already slowing global economy to a standstill. Global economic output is estimated to fall by 3.5% in 2020 (IMF January 2021 estimates). In view of this, Governments and central banks across the world deployed a range of policy tools to support their economies such as lowering key policy rates, quantitative easing measures, loan guarantees, cash transfers and fiscal stimulus measures.

India recognized the disruptive impact of the pandemic and charted its own unique path amidst dismal projections by several international institutions of the spread in the country given its huge population, high population density and overburdened health infrastructure.

The Survey observes that the intense lockdown implemented at the start of the pandemic – when India had only a 100 confirmed cases – characterized India’s unique response in several ways. First, the policy response was driven by the findings from both epidemiological and economic research.

Specifically, faced with enormous uncertainty about the potential spread of the pandemic, the policy implemented the Nobel-prize winning research in Hansen and Sargent (2001) that recommends a policy focussed on minimising losses in a worst-case scenario. Faced with an unprecedented pandemic, loss of scores of human lives captured this worst-case scenario.

Moreover, epidemiological research highlighted the importance of an initial, stringent lockdown especially in a country where high population density posed difficulties with respect to social distancing. Therefore, India’s policy humane response that focused on saving human lives, recognised that the short-term pain of an initial, stringent lockdown would lead to long-term gains both in the lives saved and in the pace of the economic recovery. The scores of lives that have been saved and the V-shaped economic recovery that is being witnessed bear testimony to India’s boldness in taking short-term pain for long-term gain.

Second, India recognised that the pandemic impacts both supply and demand in the economy. The slew of reforms – again unique amidst all major economies – were implemented to ensure that the supply-side disruptions, which were inevitable during the lockdown, are minimized in the medium to long-run.

The demand side policy reflected the understanding that aggregate demand, especially that for non-essential items, reflects precautionary motives to save, which inevitably remains high when overall uncertainty is high. Therefore, during the initial months of the pandemic when uncertainty was high and lockdowns imposed economic restrictions, India did not waste precious fiscal resources in trying to pump up discretionary consumption.

 

Economy

National Statistics Day: Status of ‘End Hunger’ in J&K

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Status of ‘End Hunger’ in J&K

Altaf Hussain Haji

Crowdfunding for businesses in J&KHunger is a burning issue for every UN member country. This is the reason that commemorations of this year’s National Statistics Day in our country has been aligned to create awareness about hunger as per the UN target of Sustainable Development Goals. In India, Statics Day is celebrated every year on June 29 in remembrance of Prof  PC Mahalanobis for his contribution in the field of economic, planning and statistics. The theme of this year Statistics Day, June 29, 2021, is ‘End Hunger, Achieve Food Security and Improved Nutrition’. Hunger and malnutrition badly affect the development and wellbeing of the States/UTs of the nation and the progress of the reduction of percentages of hunger at the national level is still off track. Jammu and Kashmir is also among one of the UTs where hunger exists as per the current report of SDG released by the government of India. There is also a long road ahead to reduce hunger and malnutrition by or before 2030 in Jammu and Kashmir.

Undernourishment, malnutrition and wasting are different ways of hunger found in every country in the world. Undernourishment occurs when people do not intake enough calories to meet minimum physiological needs. Malnutrition is caused when the peoples have an inadequate intake of protein, energy and micronutrients. The third way of hunger is wasting which usually the result of starvation or disease of acute malnutrition with substantial weight loss.

 Status of ‘End Hunger’ in J&K

As we know that second goal of Sustainable Development with agenda Zero Hunger is one of the important goals out of 17 Sustainable Development Goals. It is to mention here that the United Nations (UN) General Assembly held on September 25,  2015, adopted the document titled “Transforming our World with the 2030 Agenda for Sustainable Development”.  The SDGs are a comprehensive list of global goals integrating social, economic and environmental dimensions of development. Zero Hunger is the second Sustainable Development Goal (SDG2) with the aim to end hunger, achieve food security and improved nutrition and promote sustainable agriculture. The SDG2 has 7 targets such as beneficiaries covered under the National Food Security Act (NFSA), 2013, children under five years who are underweight, children under five years who are stunted, pregnant women and adolescents aged 10- 19 years who are anaemic, the rice and wheat produced annually per unit area (Kg/Ha) and Gross Value Added (constant prices) in agriculture per worker (in lakhs/workers)  to measure the availability of food, improvement in nutrition and promotion of sustainable agriculture respectively.

The composite index score of the UT Jammu and Kashmir in SDG-2 goal has improved by 8 points from 62 in 2019-20 to 70 in 2020-21 as per SDG report 2020-21 released by NITI Aayog.  The UT Jammu and Kashmir among the Seven States and four UTs bagged a position in the category of Front Runners and said as the increase in overall score, the Jammu and Kashmir in Sustainable Development Goals will achieving Zero hunger in time.

Here are some indicators of Jammu and Kashmir in comparison at national level figure regarding the progress of End hunger by or before 2030 of the agenda of SDGs.

At the national level the percentage of beneficiaries covered during 2019-20 under the National Food Security Act, 2013 ((NFSA) is 99.51 percent and for UT Jammu and Kashmir, it is 97.02 percent achievement as the target fixed to achieve it 100 percent by 2030.

At the national level, the percentage of children under five years who are underweight is 33.4 percent and for UT Jammu and Kashmir, it is 13 percent as the target to reduce it 1.9 percent.

At the national level, the percentage of children under five years who are stunted is 34.7 percent and for UT Jammu and Kashmir, it is 15.5 as the target to reduce it 6 percent.

At the national level, the percentage of pregnant women aged 15-49 years who are anaemic is 50.4 percent and for UT Jammu and Kashmir, it is 38.1 as the target is to reduce it  25.2 percent.

At the national level, the percentage of adolescents aged 10-19 years who are anaemic is 28.4 percent and for UT Jammu and Kashmir, it is 15.8 as the target is to reduce it to 14.2 percent.

The rice and wheat produced annually per unit area (Kg/Ha) was found 2995.21 Kg/Ha at the national level and for UT Jammu and Kashmir it is 2339.65 Kg/Ha as the target is to achieve it 5322.08 Kg/Ha

The Gross Value Added (constant prices) in agriculture per worker (in Lakhs/worker) was calculated as 0.71 at the national level and for UT Jammu and Kashmir, it is 0.88   as the target is to achieve it 1.22.

The above indicators pertaining to Jammu and Kashmir showed that there is still a long road ahead to reduce hunger and malnutrition by or before 2030 in Jammu and Kashmir and it is too difficult to achieve or reduce targets due to disturbance and law and order situation, unique features and a strategic location. Further, the index score at the national level for end hunger is 47 while UT Jammu and Kashmir have 71 which seems that the situation is somehow better.

As UT Jammu and Kashmir have unique features and a strategic location, the speedy sustainable development of Jammu and Kashmir needs an integrated approach. The top priority of the government should be to create a secure environment by improving the law and order situation. State finance should also receive proper attention in order to ensure better fiscal management. A sound policy should be devised to exploit the potential in the sectors of strength. In a nutshell, sound policy and good governance can lead the UT of Jammu and Kashmir to a faster development path and is able to achieve the SDGs well in time. Further, there should be a sizable increase in the utilisation of funds for rural development schemes in the UT and the pace of implementation of programmes needs to be accelerated.

Also, efforts are needed for the development of infrastructure, generation of employment and alleviation of poverty in rural areas to bring about the desired socio-economic development of Jammu and Kashmir.  There is also an urgent need to undertake an impact assessment study of the schemes implemented by the government on the socio-economic conditions of the people. Such a study would help in assessing the ground realities of the impact of various schemes on the social and economic conditions of people inhabiting these areas.

At the last, I want to mention here that by working on SDG2 last few years, the measures are taken such as promoting sustainable agriculture, supporting small-scale farmers and creating equal access to land, technology and markets in order as a fundamental rule to the eradication of hunger in Jammu and Kashmir, a number of initiatives have been taken by the Government of India and UT government to ensure food for all and has launched food security programmes owing to the National Food Security Act, 2013. The stress on sustainable agriculture may be observed from the fact that one of the missions under the National Action Plan on Climate Change (NAPCC) is the National Mission on Sustainable Agriculture (NMSA). In the end, as per the current report, UT Jammu and Kashmir have made significant progress in the area of food security despite having several challenges.

Altaf Hussain Haji, ISS, is Deputy Director General National Statistical Office, Shimla. He can be contacted at [email protected]

 

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Crowdfunding for businesses in J&K

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Crowdfunding for businesses in J&K

Altaf Hussain Haji

Crowdfunding for businesses in J&KThe UT of Jammu and Kashmir has unique features and a strategic location that tells a story of various sectors for employment, development and wellbeing. The manufacturing and services sectors of Jammu and Kashmir suffered a lot due to a number of reasons in the last two decades and affected employment, development and wellbeing. As per current reports of Sustainable Development Goals (SDGs) of the government of India, unemployment increased and overall less development happened in Jammu and Kashmir.  At this movement, the government and other institutions need to think of an integrated approach in order to tackle the serious problems of unemployment, derailment from development and little attention towards various indicators of SDGs. The initiatives of the government must be speedy attention for trying to reduce unemployment through sustainable manufacturing and services sectors in Jammu and Kashmir.

The government is trying hard to create a secure environment for improving the manufacturing and services sectors in Jammu and Kashmir.  The current pandemic and instability derailed the institutions of government and non-government sectors and created a lot of problems of unemployment particularly in the service sector in Jammu and Kashmir in the last few years. There are only better hopes of employment in the service sector in Jammu and Kashmir due to the vast avenues of the tourism sector.  Further, a large number of small entrepreneurs and enterprises of manufacturing and services sectors in Jammu and Kashmir did not sustain due to the financing through various sources.

The lack of financing is the only reasons here behind the manufacturing and services sectors for their sustainability establishment in Jammu and Kashmir in the present scenario. It is to state here that state finance should also receive proper attention in order to ensure better fiscal and financial management for such small entrepreneurs and enterprises which played an important role in the business venture or economy of Jammu and Kashmir. A sound policy should be devised to exploit the potential in the sectors of strength. In a nutshell, sound policy and good governance can lead the UT of Jammu and Kashmir to a faster development path.

Also, efforts are needed for the development of infrastructure, generation of employment and alleviation of poverty to bring about the desired socio-economic development of Jammu and Kashmir.  There is also an urgent need to undertake an impact assessment study of the schemes implemented by the government on the socio-economic conditions of the people, particularly those belonging to the economy of various sectors.  On the other side crowdfunding, a new concept developed for new business ventures can be useful at this moment in Jammu and Kashmir

The concept of crowdfunding has become an increasingly popular way for individuals and businesses alike to raise much-needed capital for self-interest and employment generation for others. The financially sound persons may help to promote the business and generate employment for others.

There are different types of crowdfunding such as donation-based, reward-based, equity-based, debt-based and real estate-based crowdfunding. Donation-based crowdfunding is simply asking for a small donation from a large number of people to raise money for personal needs as well as community-based projects like raising money to cover medical expenses or an unexpected financial crisis or raising funds for local projects like a community garden or new park.  Reward-based crowdfunding is another common type of crowdfunding, typically used to raise funds for a new startup or organization. In equity-based crowdfunding, it is the best for small to medium-sized companies that are seeking a large amount of capital to launch or grow their business.

Debt-based crowdfunding is a fast and easy way for both individuals and businesses to raise the money they need. Debt-based crowdfunding works by collecting donations with the promise to pay them back at a later date and real estate crowdfunding is becoming more popular for investors recently who want to put their money in real estate, without the hassle of getting a traditional loan or the obligation of owning all of a single property.  Typically, an individual or a real estate company will collect funds from investors to pay for a large property, like an apartment building.

The financially sound persons of Jammu and Kashmir may help to use the concept of crowdfunding such as reward-based crowdfunding, equity-based crowdfunding, and debt-based crowdfunding for a new or existing business venture, employment generation and development of the economy of the UT.   One of the reasons that manufacturing or others sectors do not grow in Jammu and Kashmir is the lack of awareness of the concept of crowdfunding among business venture culture.

It is true that the rich people of Jammu and Kashmir did not donate to business ventures for self-benefits and help others. The financially sound persons in Jammu and Kashmir mostly keep their wealth held with themselves and do not think of using excess money as crowdfunding to benefit the future generation.  A successful crowdfunding round will give a startup more leverage to come up with better terms and conditions.  As crowdfunding becomes more popular and there is a growth of the number of platforms facilitating transactions, it is extremely important for the right ingredients needed to attract the maximum number of investors.

It is suggested to consider some important facts before crowdfunding for a startup project or new business venture.

Crowdfunding strategies

Strategic Use of Social Media:  It is a good idea to have a wide reach as possible through various modes of publicity including social media. This means picking the right networks to complement marketing and content strategy and ensuring that the right supporters are targeted.

Make and Use Video Clips:  The attractive professional video clips made properly can help potential donors to get a better idea of what is being pitched. A product or service can be seen in action rather than through a series of stills or a wordy brief.

Wait for the Right Time to Ask for Money: With the right enthusiasm and the story of the project presented, people will want to add support naturally. Make sure the backers know what they are supporting and what they can expect in return. Backers should be allowed to invest as little or as much as they want.

Build Interest: Before and during the campaign, it is necessary to generate interest in the business. A pre-existing fan base can help a campaign achieve a strong start. A blog, a documentary, or a social media presence can help generate this interest. The sharing ideas of project/business venture and get feedback and expert guidance on how to improve during crowdfunding.   The number of investors who can track the progress also may help you to promote your brand through their networks and become the most loyal customers through the financing process.

With interaction during conducting annual surveys of industries of National Statistical Office (NSO), Field Operations Division, some entrepreneurs and owners of enterprise of the manufacturing sector in Srinagar, there is a lot of requirements of crowdfunding at this movement in Jammu and Kashmir for the sustainable establishment, economic development and wellbeing of the society. The Good Samaritans of Jammu and Kashmir who are financially sound should come forward for help through crowdfunding particularly reward-based crowdfunding, equity-based crowdfunding and debt-based crowdfunding to save the economy and improve the wellbeing of the people of Jammu and Kashmir.

The new way happens only if the trust will be built among investors and loyal customers during crowdfunding.  Only Trust makes this concept in successes for the development and wellbeing of the people. At last, it is to say that crowdfunding must be appreciated for startups of new initiatives and ideas. The government should also recognize such initiatives and ideas for the betterment of the economy of Jammu and Kashmir.

Altaf Hussain Haji, ISS, is Deputy Director General National Statistical Office, Shimla. He can be contacted at [email protected]

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Beyond GDP: The economy of well-being

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Beyond GDP: The economy of well-being

Altaf Hussain Haji

All of us have heard about the term ‘standard of living which means all the elements in someone’s life that contribute to their happiness.   Standard of living is a broad term that encompasses many factors including some that are not bought and sold in the market.  The standard of living is an economic opportunity that focuses on basic material factors such as income, gross domestic product (GDP), life expectancy, etc.  It is closely related to the quality of life, which can also explore factors such as economic and political stability, political and religious freedom, environmental quality, climate, and safety. In the present scenario, economic growth is commonly taken to mean a sustained increase in real GDP per capita and somehow linked with social, economic, and environmental growth. There are a lot of challenges today regarding growth and standard of living.

To solve the social, economic, and environmental challenges faced today by governments and other institutions around the world that need to embrace new ways of thinking and actively engage in widespread systems innovation to make real progress toward a healthier and more prosperous life.

The economy of well-being highlights the need for putting people at the centre of policy. It is important to move away from an attitude of “grow first, redistribute and clean up later”, towards a growth model that is equitable and sustainable from the outset.

The well-being economy encompasses a diverse array of ideas and actions aimed at advancing social well-being through governance structures that support peaceful co-existence and meet basic human needs. A well-being economy provides people with equal opportunities for advancement, a sense of social inclusion, and stability—all of which contribute to human resilience and, importantly, sustains and supports harmony with the natural world. It aims to serve people and communities first and foremost and offers a promising path toward greater social well-being and environmental health. The current economic system s become addicted to “growth at all costs”, as measured by Gross Domestic Product (GDP) but ignores the wellbeing of the individuals at all levels of development. Instead, we need an economic system that takes a preventive approach to social and environmental challenges to ensure that the kinds of related, follow-on problems of the standard of living or a person’s happiness.

The level of GDP per capita, for instance, captures some of what we mean by the term standard of living, as illustrated by the fact that most of the migration in the world involves people who are moving from countries with relatively low GDP per capita to countries with relatively high GDP per capita.

The GDP is a limited tool for measuring the standard of living because many factors that contribute to people’s happiness are not bought and sold. The GDP includes what is spent on environmental protection, healthcare, and education, but it does not include actual levels of environmental cleanliness, health, and learning. GDP includes the cost of buying pollution-control equipment, but it does not address whether the air and water are cleaner or dirtier. GDP includes spending on medical care, but it does not address whether life expectancy or infant mortality have risen or fallen. Similarly, GDP counts spending on education, but it does not address directly how much of the population can read, write, or do basic mathematics.

The OECD is one such organization, which has been working on the measurement of well-being beyond GDP since the 1970s and has seen the concept of well-being develop from an interesting side-note into a well-established agenda for policy. As we know that the Organization for Economic Cooperation and Development (OECD) is an international organization that works to build better policies for better lives.  The main goal is to shape policies that foster prosperity, equality, opportunity and well-being for all at the international level. The OECD’s Well-Being Framework has further developed the concept by providing us with a clear definition and rigorous analytical basis. The Framework for Policy Action on Inclusive Growth has helped identify the channels through which governments can promote greater well-being and sustainable economic growth for all their citizens.

The economy of well-being highlights the need for putting people at the centre of policy. It is important to move away from an attitude of “grow first, redistribute and clean up later”, towards a growth model that is equitable and sustainable from the outset.

An economy of well-being has four main pillars. The first pillar is education and skills. Skills are the most important driver of long-term economic growth. The policy can help leverage the benefits of education. For example, higher attendance in pre-primary education, greater autonomy of schools, reduced gaps between academic and vocational branches of education and higher funding for tertiary education can all boost human capital, while also improving the efficiency of education systems. At the same time reducing inequalities of access and opportunity at school is essential to promote better educational outcomes, as countries with high levels of inequality in education and skills also record lower average educational performance.

The second pillar is health. Evidence shows that good health fuels economic growth, productivity and individual earnings. Good health is also a key factor for people’s well-being. It allows them to invest in education and skills, access quality jobs and enjoy a better quality of life.   It has seen that increased spending has driven much of the improvement in health outcomes, but we need to go beyond. This means looking at the range of services covered by primary healthcare, as well as addressing new or persistent risk factors. Reducing inequalities of access is also essential to promote better health outcomes, as the proportion of people in poor health weighs heavily on key health indicators. Moreover, health inequalities are often stratified along economic, educational or occupational lines. For instance, unmet care needs are substantially higher for low-income groups.

The third pillar is social protection and redistribution. Both play an important role in reducing economic volatility and fostering resilience. They also prevent inequality today from translating into inequality of opportunities for the next generation. Recent OECD research confirms that lower inequality is associated with higher GDP growth.  Combining income-support schemes with active labour market policies provides effective protection and supports employment. Promoting more progressive tax and benefit systems can help countries promote equality of opportunity and social mobility. Social protection systems also need to adapt to a changing world of work, notably by improving coverage for non-standard workers, and to evolving social risks, notably the increasing prevalence of lone-parents and frail elderly.

The fourth pillar is gender equality. Raising women’s employment and hours worked can deliver productivity gains and higher GDP growth. It can also reduce income inequality, strengthen resilience and consolidate the middle class.

There are many other dimensions to an economy of well-being, for instance, the quality of housing and infrastructures, as well as the equitable access to those; and of course the quality of the environment that significantly affects health outcomes, especially among the poorest.

The fact that GDP per capita does not fully capture the broader idea of the standard of living has led to a concern that the increase in GDP over time is illusionary. It is theoretically possible that while GDP is rising, the standard of living could be falling if human health, environmental cleanliness, and other factors that are not included in GDP are worsening. Fortunately, this fear appears to be overstated.

Since 1970, the air and water in the United States have generally been getting cleaner. New technologies have been developed for entertainment, travel, information, and health. A much wider variety of basic products like food and clothing is available today than several decades ago. GDP does not capture leisure, health, a cleaner environment, the possibilities created by new technology, or an increase in variety. Ignoring these factors, GDP would tend to overstate the true rise in the standard of living.

At the last to mention here, that during COVID19 pandemic in the whole world regarding health and well-being. The pandemic affects badly the standard of living due to the poor health system at every level and is continued to create many hurdles in the processes of wellbeing. It is difficult to maintain a healthy lifestyle when we are in the middle of a crisis like this. The uncertainty and worries related to finances, childcare, elderly parents, and job security disrupt our routines, our lifestyles and mental health. The uncertainty about the future, the ceaseless news coverage and a constant social media-driven flood of messages can increase our sense of anxiety. It is also important to maintain a healthy lifestyle and get back into a routine at this movement. This also showed how important is wellbeing as compared to gross domestic product nowadays.

Altaf Hussain Haji, ISS, is Deputy Director General National Statistical Office, Shimla. He can be contacted at [email protected]

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