Events & Issues
New Delhi, 6 January 2016
India’s Growth Strategy
VITAL TO CHANGE DEVELOPMENT PATH
By Dhurjati Mukherjee
India has the potential to be the world’s
fastest growing economy over the next decade far outpacing China. This
conclusion by the Harvard Centre for International Development indeed has come
as shot in the arm. The findings are based on the country’s productive capabilities
and diversification possibilities into complex products, including
pharmaceuticals and electronics.
However, the moot point: Whether
even with 7 per cent GDP growth we would be able to ensure balanced and
socially inclusive development? Whereby the dichotomy between urban and rural
sectors would be checked?
Arguably, what our politicians,
planners and a section of economists, mostly Western educated, miss is that
just ensuring higher GDP does not solve India’s problem. Recall, earlier too
there were years which witnessed a good growth rate but it was found that
grass-root problems remained. Namely, development of social and physical
infrastructure which unfortunately is very poor compared with others similar
countries.
Indeed, for this to become a
reality, India needs to attract
foreign funds like pension funds in Japan
and Canada and Australia which
are on the lookout for investment options. The latter has $ 2 trillion in
pension funds and would be keen to invest in robust infrastructure projects in India. Add to
this, at the recent G20 meet, Prime Minister Modi had proposed that the group should
be used as a platform for funds disbursement.
Infrastructure apart, sadly, employment
also does not figure as a priority in the NDA Government’s scheme of things. Undeniably,
the lack of attention to employment generation in a nation saddled with the
youngest population is a serious cause of concern.
Shockingly, statistics show that
only 18 per cent of people working people were regularly employed and 30 per
cent were casual workers dependent on daily or periodic jobs renewal. The
remaining 52 per cent were self-employed with extremely low incomes, no work
throughout the year and a highly competitive market. Add to this, a significant
portion remain under-employed.
Further, over
the years the problem has aggravated specially in the last three years due to
the Government not taking adequate steps to promote labour intensive industries
with latest technology. Development in East Asian economies such as South
Korea, Taiwan and Singapore in the 70s and 80s and recently China underscore
they relied on growth of labour intensive industries resulting in jobs expansion
as the principal means of prosperity for its poor population.
Clearly, greater employment
opportunities is the only guarantor of a better life for ordinary people.
Though the Government has re-launched its Skill Development Programme with
great vigour, it remains to be seen how effective it is. Only time will tell
whether those who acquire requisite skills would be helped by the Government to
set up ventures and make them successful.
Alongside, unless there is
meticulous transformation of the rural sector with an increase in the poor’s livelihoods
reflected in higher consumption, the basic problem of the country would
continue. Already, rural distress has
led to increasing suicides. What good achievements if people die of hunger or
suffer from malnutrition?
As it stands, former Prime Minister
Manmohan Singh and late President Kalam etc have times out of number emphasized
revitalization of the rural sector to combat poverty. According to them, the
share of agriculture in national income continues to rapidly fall even as the
public’s dependence on remains static. Thus it is imperative, latest science
and technology methods be adopted to increase agricultural productivity,
affordable technologies for energy and water efficiency and farm and non-farm expertise
to promote growth.
Further, even as Government figures show
new project announcements and projects underway, banks are worried as the
credit off take by corporates has plunged to around 4 per cent. Obviously the
key to growth lies in building a proper investment environment. Worse, investment
by the public sector also is not quite healthy, specially public health and education.
Undoubtedly, unless there is
balanced development which reaches the lowest tiers of the population,
specially those in rural areas, there would be social unrest. An example, increasing
rape and molestation cases. Think. If the youngsters were properly educated and
engaged in productive work, they would not positively respond to social norms
and not indulge in untoward activities.
Consequently, we need to urgently bring
about changes in our development path and strategy. Emphasis on Make in India to boost
industry is not enough we need high levels of efficiency along-with technological
breakthroughs to have competitive pricing and make inroads in markets of
neighbouring countries. Extremely difficult but not unachievable.
Take China it has low cost of
manufacturing, specially in electronic goods and has successfully invaded world
markets. True, its economic disparity is not less than India but the
situation there is better due to adequate manufacturing facilities and ample
social infrastructure like schools and toilets.
India has to play a vital role in setting
up a huge number of labour intensive small scale units having the latest
technological inputs with high efficiency. These could be partly funded by the Government
if set up in rural areas and would take care of employment generation and help
economic growth.
However, the focus has to be on the
agriculture sector whose modernization is urgently required. The lab-to-land
approach needs to become a reality at the earliest, specially in Eastern and
North-Eastern regions. The process has started but research needs to be
transferred to the field to increase productivity.
Thus,
without being too optimistic on the growth projections, there is need to
concentrate on an inclusive development strategy that is geared to advancement
of the rural sector, making available the required physical infrastructure, setting
up labour intensive industries to generate employment and focus on education
and health. In sum, an integrated developmental approach at the grass-root level
towards economic prosperity. --- INFA
(Copyright, India
News and Feature Alliance)
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