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Changing Development Scenario:NEW STRATEGIES ENCOURAGING, By Dhurjati Mukherjee, 5 August, 2013 Print E-mail

Events & Issues

New Delhi, 5 August 2013

Changing Development Scenario


By Dhurjati Mukherjee

The economic crisis is not all that bad as made out to be. Though the GDP has been poor during the last financial year (2012-13) and might not reach 6% during the current fiscal, employment and consumption has shown a one-third increase in average household consumption over two years, above the inflation rate.

Moreover, as Prime Minister Manmohan Singh pointed out at the recent Assocham meeting, poverty declined by 2 percentage points per annum between 2004-05 and 11-12. Notwithstanding, this is disputed by many economists and social scientists.

Undeniably, rural areas have been backward wherein social and physical infrastructure needs to be developed to facilitate improvement in livelihood. But it is gratifying that rural real wages have risen faster, 6.8% annually during the 11th Plan compared to an average of just 1.1% in the preceding decade. Urban trends are similar. 

Consequently, consumption measures show rural monthly spending per capita increased from Rs 1053 to Rs 1420. Alongside NREGS helped to generate income amongst the rural masses. In fact, between 1993-94 and 11-12 the cereals share halved from 24.2% to 12% in rural and 14 to 7.3% in urban areas.

But the share of non-food items rose from 36.8 to 51.4% in rural areas, showing growing prosperity. The share of beverages, eggs, fish, fruits and nuts increased, indicating that protein content would eventually help in curbing malnutrition to a certain extent.

At the national level, average per person spending grew by 165% in rural and 190% in urban areas between 2000-2012, according to the National Sample Survey Organization (NSSO) recently. Pertinently, while Kerala, Punjab, Haryana, Tamil Nadu and Andhra Pradesh were the top five States in rural households, Maharashtra, Karnataka, Kerala, Haryana and Punjab topped among urban households.

 However, it needs to be mentioned that the income divide between the rich and the poor has grown rapidly. According to NSSO’s 2013 figures, spending and consumption by the richest 5% zoomed by over 60% between 2000-2012 in rural areas while the poorest 5% witnessed an increase of just 30%.

The same trend was manifest in urban areas where the richest segment’s spending increased by 63% but the poorest saw a nominal increase of 33%. Distressingly, inflation in some rural areas is outstripping urban price rise in pulses, oil, milk and fruits posing a problem for impoverished people.    

Notably, there is a concerted effort to improve livelihood conditions by the Government. The recent Food Ordinance is perhaps the biggest Government intervention in fighting hunger and malnutrition with around 80 crores people to be covered under it.

 Importantly, the scheme gives rights to 75% rural and 50% urban population to buy rice at Rs 3 a kg, wheat at Rs 2 a kg and coarse grains at Re 1 a kg. Alongside 35 kg of grains would be given to each Antyodaya family irrespective of number of members. Other beneficiary families would be entitled to 5 kg per member per month at the same price. Add to this, the ordinance stipulates an allowance of Rs 1000 per month for lactating women for six months up to two children.  

This apart, the National Land Reforms Policy has drafted a unique plan to provide agricultural and homestead land to the 60% landless households, thereby reflecting Vinoba Bhave’s Gramdan-Bhoodan movement thinking. Data shows 30% households have no farmland and another 30% are near landless, overall eight million households (4%) lack homestead land.

Towards that end, the Government proposes to provide at least 10 cents (4400 sq. ft.) of homestead land for each homeless family and an unspecified area of agricultural land for landless. But experts believe that till State Governments enforce their land ceiling laws strictly, it would be very difficult to get land for redistribution.

Alas, in spite of all positive strategies being taken, the demographic divide is causing concern. Primarily due to two factors, one, there is drastic need to improve the workforce through better education, health and skill development. Two, creation of better livelihood opportunities.

While resources have been a big constraint given the development challenges and experts are critical of the meagre achievements, balanced development, especially in the rural areas, needs to be seriously considered.  

Another aspect which needs serious attention is employment generation. Whereby, India needs to create 100 million new jobs in the next decade as only 23 million jobs were created between 2004-05 and 11-12, compared to 50 million between 1999-2000 and 04-05.

Indeed, one needs to encourage micro and medium units, especially those that are labour intensive and agro-based industries which can generate large scale employment. This would have a multiplier effect in reviving the rural sector and reducing pressure on agriculture. Reports indicate that a growing segment of the male workforce have become agricultural labour from one-time cultivators.

Admittedly, the IT sector has been successful in creating many jobs though induction of sophisticated technology would give a boost to this sector. Furthermore it has to be ensured that the sector remains competitive to ward off challenges from China, South Korea, Singapore etc.

Meanwhile, the Centre has asked banks to set up dedicated branches to meet cash requirements of micro, small and medium enterprises (MSMEs) in every district of Bengal and North-East within three months, asserted MSME Minister KH Muniyappa. Greater coordination among entrepreneurs, Government and bankers would greatly improve the competitiveness of the sector and make them viable.  

In the ultimate, despite disagreement on figures and development indicators, there is trend of improvement on several fronts specially the backward rural sector which is witnessing growth, no matter one can quibble this should have been faster. Undoubtedly, the decline in poverty levels in some backward States is a welcome sign and with concerted efforts results would be more encouraging in the coming years. ----- INFA

(Copyright, India News and Feature Alliance)


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