4.2. Criticism of Neo-Liberal Economic Reforms / Is the Neo- Liberal Policy of 1991 Sustainable?

♤ Low human development rankings – 131 in HDI 2016

♤ Rising economic inequalities

♤ Lagging agricultural sector, rising farmer suicides

♤ Rise of crony capitalism

♤ Increasing non-performing assets of banking sector

♤ Structural inequalities embedded in class, caste, gender and religion have not only grown after reforms, attempts at privatizing public services such as health and education have also led to further marginalization of the disadvantaged groups from the mainstream

♤ Lack of employment opportunities

♤ The decades prior to 1991 may have been years of slow growth, but it is equally true that state-led growth did create capacities which enabled the economic reforms to reap the benefits of liberalization.

♤ Globalisation has contributed to Informalisation of Indian economy

o More use of external labour, such as contract workers, out-workers, agency labour, temporary workers and tele-workers.

o Numerical decline of the organised workforce, the expansion of the informal sector and informalisation of work.

o This ‘informalization’ of labor has taken place not only in the informal sectors of the economies but also in the formal sectors through out-sourcing and sub-contracting of output and jobs from formal sectors to informal sectors.

o Impacts of informalisation:

 Inadequacy of social security nets, weakening trade unions and growing wage inequality.

 The incidence of poverty is much greater among informal workers.

 Lowering down productivity of economy by overlooking training and development of informal human resource.