Merely adding contract labour will never improve the economyIt is sheer common sense. Go to any public sector or private bank. Just ask the Bank Manager if he would give a person loan to any casual or contract labour person, even if he is employed with a highly reputed group like the TVS group organization's or Ashok Leyland or the Mahindra Group.
The Bank Manager would readily explain that such loans are meant only for those on regular rolls and where the company would accept the responsibility of deducting the EMI and giving it to the bank. In fact, there will be an agreement with the company in most cases.So, credit off take for housing loans or for buying consumer durables are largely restricted to Government employees or those in the IT sector
But there is a catch. I have a car. Why should I buy another car? I have a TV, washing machine, a couple of air-conditioners and what not. Where is my neee for any loan?
However, we only have contract labour everywhere. Since there is very less retail credit off-take, the banks are flush with cash and interest rates on deposits will be very much less. The senior citizens are at the receiving end and even those with good incomes get very poor returns on fixed deposits, which goes to depress their spending habits.
The only way to break this cycle is to have more regular jobs and not merely contract and casual jobs. But this is exactly the rule after 2014. We should reverse policies where the capitalists are very happy, but the middle classes are not. And sure enough, the bank managers will obviously have more heart attacks, as they will be under pressure to encourage retail credit.