Introduction
This response presents brief but comprehensive explanations of four important concepts in economic policy: Food Security, Pricing Paradox, Public-Private Partnership (PPP), and Employment Elasticity. These concepts are critical in understanding the challenges and strategies in India’s development policy framework.
i) Food Security
Food security refers to a situation where all people, at all times, have physical, social, and economic access to sufficient, safe, and nutritious food to meet their dietary needs and preferences for a healthy and active life.
Dimensions of Food Security:
- Availability: Adequate food supply through domestic production or imports
- Accessibility: Individuals must have sufficient income or resources to obtain food
- Utilization: Proper use of food through balanced diet, clean water, and health care
- Stability: Reliable access to food over time without risk of sudden shocks
In India, programs like the Public Distribution System (PDS), Mid-day Meal Scheme, and National Food Security Act (NFSA), 2013 aim to ensure food security for vulnerable sections.
ii) Pricing Paradox
The pricing paradox refers to a situation where the market price of a good does not reflect its real value or utility. A classic example is the “diamond-water paradox” as explained by Adam Smith.
Though water is essential for survival and has high use value, it is usually cheap. Diamonds, which are not essential for survival but are scarce, are expensive. This paradox illustrates the difference between use value and exchange value.
Modern economics resolves this paradox by introducing the concept of marginal utility and scarcity—price is determined by the marginal (additional) utility and availability of a good, not its total usefulness.
iii) Public Private Partnership (PPP)
PPP is a collaborative agreement between the government and private sector entities to deliver public infrastructure or services.
Features:
- Long-term contractual agreements
- Risk-sharing between public and private partners
- Private sector brings in finance, technology, and efficiency
- Public sector ensures social and regulatory oversight
Examples in India: Highways (e.g., National Highways under NHAI), metro rail systems, airports (e.g., Delhi and Mumbai), and health infrastructure.
PPP is crucial for bridging infrastructure gaps and improving service delivery without putting excessive burden on government finances.
iv) Employment Elasticity
Employment elasticity measures the responsiveness of employment growth to the growth in output or GDP. It indicates how many jobs are created with a 1% increase in economic output.
Formula: Employment Elasticity = % Change in Employment / % Change in Output
Interpretation:
- If elasticity is 1, employment grows at the same rate as output
- If it is less than 1, employment grows slower than output
- Zero or negative elasticity indicates jobless or job-loss growth
In India, employment elasticity has declined in recent years, meaning economic growth has not translated proportionately into job creation. Sectors like manufacturing and IT have shown lower elasticity due to automation and skill gaps.
Conclusion
These four concepts—food security, pricing paradox, public-private partnerships, and employment elasticity—offer valuable insights into India’s economic challenges and policy tools. Addressing food insecurity, improving infrastructure through PPPs, correcting pricing inefficiencies, and ensuring job-rich growth are critical for sustainable and inclusive development.