GS-2: Effect of policies and politics of developed and developing countries
GS-3: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.
USA’s COVID rescue plan & lessons for India
Context: During Joe Biden’s first joint address to the US Congress as President, he outlined a new paradigm for the US developmental pathway.
Key Features of Joes Biden’s Plan
Blue Collar Job Creation: Biden stated that “Nearly 90% of the infrastructure jobs created in the American Jobs Plan do not require a college degree. 75% don’t require an associate’s degree. The American Jobs Plan is a blue-collar blueprint to build America”
Strengthen Workers Right: To further boost the bargaining ability of the working class, he called on Congress to pass the Protect the Right to Organize Act, which will support the right to unionise.
Gender Parity & Increasing Minimum Pay: Biden argued in favour of raising the minimum wages in US and providing equal pay to women. He said “let’s raise the minimum wage to $15. No one working 40 hours a week should live below the poverty line”.
Access to good education: Here, Biden wants to increase universal public education from 12 to 16 years as well as give increase grants and invest in historical Black colleges and universities, tribal colleges, minority-serving institutions because these institutions don’t have the endowments.
Quality, affordable child care: The new plan aims to guarantee that low- to middle-income families will pay no more than 7% of their income for high-quality care for children up to the age of 5.
12 weeks of medical leave: Paid medical leave makes sure that no one should have to choose between a job and taking care of themselves or their loved one
Addressing Child Care Poverty: Another element in Biden’s plan puts money directly into the pockets of millions of Americans by expanding tax credits for every child in a family — aimed at helping more than 65 million children and cutting child care poverty in half.
Affordable Healthcare: Biden proposed to bring down the healthcare premiums and the price of prescription drug. He stated that “Health care should be a right, not a privilege, in America”
Bottom up/Middle out economics instead of “Trickle down” economics: To finance these plans, Biden junked the long-held notion of “trickle down” economics (TDE) that advocated tax cuts for wealthy people. He announced that wealthiest 1 per cent of Americans need to begin to pay their fair share.
So, what is the significance of Biden’s speech for India’s economy?
Moving away from Neoliberalism: Biden’s strategy — big government spending push as well as focusing on raising revenues from the rich and the business class to rebuild the economy — is in stark contrast to neoliberal approach of minimum government strategy adopted by Union government since 2014.
Growing Inequality is the problem: The middle class in India was likely down by one-third in 2020 and around 75 million were pushed below the poverty line even as India became the country with the third-most billionaires in the world. Similar type of growing inequality is sought to be addressed by Biden’s strategy of redistribution of wealth by increased governmental intervention.
