To grow rapidly, or not to grow rapidly, that is the question!

When Hamlet says “To be, or not to be, that is the question”, it certainly sounds very solemn and serious. After all, he is facing a life versus death dilemma. But, applying this Hamletian thinking to growth sounds ridiculous, right? When many major economies are struggling to get back to growth while being under recessionary pressure, why would a country not welcome growth?

India has come out relatively unscathed post Covid, in terms of growth, when many major economies are struggling. We obviously have the ambition to push further growth towards hitting the USD 10 trillion GDP target. How can more rapid growth be bad for India?

I was fascinated to know that this year’s Nobel prize for economics went to Claudia Goldin, an American economic historian and economist. Believe me, this fascination has nothing to do with the much publicized fact that Ms Goldin is one of the few women to win Economics Nobel prize (she happens to be the 3rd woman ever to win this prize, to be precise). I was fascinated more by the reason why she won the Nobel prize. In sum, Ms Goldin says that ‘greedy jobs’ (these are high paying, high stress jobs that require people to prioritise work over everything else including family) drive gender inequality even more. Women, after marriage or after having kids, are not able to invest more time, unlike men, and hence they fall behind, thus leading to a worsening gender equality and gender pay gap. This is the reason why a significant gender pay gap exists even in an affluent country such as the US.

This got me thinking. Setting very high growth expectations (it could be for a country, a company or even an over-ambitious individual) will invariably lead to more greedy jobs. Why? Because the more time you invest in a greedy job, the more your grow. Look at some of the greedy jobs (service sector, food delivery, people who make money by charging their time). If you put in more time in a greedy job, you can earn more. On the other hand, look at some of the non-greedy jobs- working at a factory in shifts, teaching at a school within school timings. The ability to invest more time tends to be significantly less in non-greedy jobs as you are bound by fixed timing.

As the Indian economy grows more and as the share of services in our GDP goes up, we run the risk of more and more greedy jobs which could worsen the gender inequality even further.

So, do you let go of growth? Certainly not. But, the growth needs to be balanced, so that inequality reduces instead of increasing. Perhaps a 7-8% balanced growth matters more than 9-10% growth that drives inequality.

To be greedy, or not to be greedy, that is the real question and the answer is crystal clear. Thank you Ms Goldin.