My View on "Formal employment remains key to financial inclusi...":
The article is well structured. But, a few points which in my opinion it has missed out are:
1. Regarding Gujarat: Concentration of industries like gem cutting, textiles- mainly through power looms and not industrial factory types and huge wholesale and retail trades in textile related areas and construction industry Large segment of migrants (coming from states like Rajasthan, Bihar, Orissa and UP) who work in these sectors do not have any bank account. One can see large serpentaine queue of migrants waiting at the entrance of Public Sector Banks like SBI in various centres like Surat to send remittances to their home. Thanks to CBS, they are able to remit funds to their home accounts though they do not have one at the work place. So, it also reflects in the low household savings in Gujarat.
2. On Savings and Consumption: True, savings ratio has not grown or grown very marginally year on year in the last few years. The author attributes it to the higher consumption. Recent study showed that there is a slackening in consumption.
3. Study the savings and investment ratio: It would be more important to see if savings go for investment or not. It would increase production (both manufacturing and services) and in turn employment. If savings made by the economy is not channelled towards investment then that would adversely affect the growth of the economy.
- Dr.S.Santhanam
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