Indian Economy, Robust economy with tattering masses

Indian Economy has been moving with a great speed for more than a decade. It has registered a growth of 8-9 % last two consecutive fiscal years, although, it is expected a slow down this financial year, but it is certainly going to be near 8%. Many people of new generation might not appreciate this phenomenal growth because they tend to compare these figures with countries like US, UK, Japan, Germany France etc., but if we make retrospection into 1950s and 1960s, only then we realise the difference. For example, in 1960 India’s per capita income was 73 US dollars, whereas; in the same period that of Thailand was 92 US dollars. In 1991, it rose to 300 US dollars and in 2004; it further rose to 500 US dollars. The per capita income is expected to touch 1500 US dollars in 2020 in today’s dollars. Now the so called ‘Hindu rate of growth’ myth is allayed.

When Budget is presented in the Indian parliament, the entire world loves to watch it, so much so that even the Sensex of the Wall Street gets affected by the speech of the FM of India. Such an achievement, by no means can be under estimated. So far as the growth of Indian Economy is concerned, the FM said in his Union Budget speech that in the last three years GDP is increased by 7.5%, 9.4% and 9.6% i.e. an average increase is about 8.8%. Almost every sector of the Economy, the growth has been nothing short of spectacular. For example, the Industries sector registered about 10.6 %, Service sector 10.4 and Non-agriculture sector registered 10.4% growth in the 2007-08. But the Agriculture sector’s performance in this regard is dismal, it is only 2.5%. If we look at the picture of area wise performance of these sectors, at least the economic indicators are very encouraging. If we see the Sector wise developments for 2007-08, the indicators are very satisfactory. Agricultural production, for example is about 219 million tonnes, decisively more than the previous year, thanks to favourable monsoon and hard labour of our farmers. Similarly, other sectors of economy also, are making the same kind of success story. The Service sector and especially the IT sector, has been writing spectacular success stories year after year. The IT professionals of India are now second to none. This Sector has been the key driver of growth in recent years, but not so much so in 2006-07, when industry and services contributed in like fashion to GDP growth. Growth in the service sector was 9.6 and 9.8% in 2004-05 and 2005-06. It picked up to 11.0% in 2006-07. The rapid growth communication and transportation in this country are gearing up the economic growth to much accelerated speed.

Railways, hitherto the ‘White Elephant’ of Indian Government has made a turn around. The operating ratio has been brought down from 1.02 to 78.03. In non-technical terms the cost of running railways has been considerably reduced. The deficit has been overcome and profit has been made. According the budget speech made by Lalu Prasad, the Railway Minister, the Railways has earned a profit of more than 20,000 crore rupees. Indian Railways has carried more than 728 MT of revenue cargo in the year 2006-07 recording a growth of 9.2% over previous year. Ministry of Railways is constructing ‘dedicated freight corridor’ to further increase the freight carriage. These are the success stories of Railways which is considerably contributing to the robust growth of Indian Economy. 

MANUFACTURING SECTOR- on the other hand is again doing well. The growth of GDP arising in this sector jumped to 12.3% in 2006-07 from 9.1% in the previous year and 8.7% in the year prior to that (i.e. in 2005-06). Overall GDP grew by 7.5% and 9.0% respectively in these two years, indicating the relatively larger contribution of manufacturing, and industry more generally, to the current heightened pace of economic expansion. 

ENERGY- Any developing economy would require energy to sustain and move forward the pace of social and economic development.

OTHER CONTRADICTIONS-

1-According to the FAO, number of hungry people in India has increased by 19 million between1991 to 2001. Nearly half the children are chronically malnourished. 

2-India has largest number of medical colleges in the world and is among the largest producers of doctors. We have now more than 20000 hospitals whereas; it was 2717 in 1951, 11174 in 1991 and 18218 in 2001. Approximately 15000 new doctors qualify every year. Paradox is that about five lakh people die from tuberculosis every year. This number is almost unchanged since independence! Almost two million cases of malaria are reported every year and are not decreasing.

3- Largest number of children in India is undernourished and they do not get adequate food to eat. According to 2001 census the infant mortality rate is 64/1000 and access to sanitation facilities is only 28%

4- India is the 4th largest producer of medicine in the world and also a large exporter of It., whereas; DPT coverage is only 55%. Number of T.B patients in India is 5 million and number of deaths due to T.B is nearly 4, 50,000(2004-05). This is the paradox in which we live.

5- The condition of children of this giant economy is far from satisfactory. According to one estimate, number of children who died before the age of 5 yrs is 63 out of 1000 . The condition of tribal children is much more precarious. In Orissa for example, number of children (below 3 yrs) severely malnourished is 21%. In Maharashtra number of tribal children who died in 2003-04 under 6 yrs of age due to malnutrition is 9000. The number of doctors in this country is only 48 in every one lakh population, which is very less in comparison with other developed nations.

These are some indicators which cry about glaring contradictions in Indian Economy. One quarter of world population is poor and according to one estimate, there are about 200 million slums in India. Dharavi in Mumbai is the biggest slum of the world. More than 40% of Indian family live in single room, whereas; Mukesh Ambani has constructed the biggest house in the world which costs about 700 crore rupees. What a contrast! 

MENIFESTATIONS OF THESE CONTRADICTIONS IN PARADOXES- even after such robust growth in Industry, construction, service and other such sectors, the growth in agriculture sector remained far from satisfaction.

The growth in agriculture sector, though lower than in the non-agriculture, nevertheless remained higher than the growth of population in 1950s. For example, the population growth during 1951-2006 was on an average 2.1%, whereas; during the same period the growth in agricultural food production was on an average 2.5%. It is perhaps due to this reason, that during this period we were, except few exceptions, self sufficient in this area. This equilibrium started showing signs of disturbance after 1990s, not incidentally when liberalisation era was ushered. With the advent of LPG , the agriculture sector gradually became victim of government’s apathy. It was during this period the food grain production started showing signs of down ward trend. In the beginning of 21st century, the production of food grains remained at 1.2% whereas; population growth came down only to 1.9%. Due to this mismatch in food production and its consumption, the Indian Economy started showing aberrations which could not precipitate till 2007-08. The data available with the Ministry of Agriculture, the per capita availability of food grains in 1990-91 was 468 grams, which declined to 419 grams in 2005-06 registering 13% decline. The euphoria of Liberalisation, Privatisation and globalisation (LPG) was such that the required amount of attention towards agriculture was/is not paid resulting in a decline of 0.26% in cultivation area over a period of 16 years. Even the cropping pattern underwent remarkable change. People in many areas switched over to commercial and cash crops. For example farmers in the states like A.P., Maharashtra, Tamilnadu some parts of Kerala switched over to cotton crop. They went on using hybrid seeds like B2 cotton indiscriminately in order to get more and more yield. Initially, all went well but gradually the problem precipitated. The cost of production soared and farmers were indebted. In absence of well a pronounced and properly implemented credit policy of Banks, the farmers were trapped in the web of money lenders. Results are devastating. More than one lakh of farmers have so far committed suicide in these areas. Situation in areas like Bidharbha, Telengana etc is very pitiable. The government came out with a loan waver policy in 2008-09 budget presented in the parliament, but it too, is not proving effecting in bringing down the cases of suicides in these areas.

According to NSSO , about 1/3rd or 200 million rural Indian populations spend only 12 rupees/ a day and consume only 12 kilograms of cereals per month. 

The urban areas are also far from good. According to reports of NSSO, urban poor consumes only 10 kilograms of cereals per month, whereas; an average rich in Delhi spends rupees1, 40,000 on wedding reception. Such is the paradox and such is the gap.

The data regarding glaring inequalities are numerous and difficult to arrange but the picture is clear. The gap between rich and poor is increasing with enormous speed. The inter-personal and inter-regional gap in economic prosperity is widening with a great speed. The rich are plucking flowers, whereas; thorns are pricking the poor. All attempts in this regard have failed to yield desired results. When India registered 8-9% growth rate, many people called it ‘robust’, ‘remarkable’ and ‘excellent’ but few called it ‘over heating of economy’. Such high speed and pace of economic growth, if allowed to go unabated without equitable distribution would precipitate in catastrophic consequences. This is the reason why the discrepancies in our economy are manifesting in different social, economic and political forms. 

RISING INFLATION- The inflation is rising and so are the prices essential commodities. The figure has reached all time high in 16 years. National and international debates have started on this issue. The rise in crude oil prices led to price rise of Petrol and diesel in many parts of the world including India. Protests in many parts of Europe became major concern for the governments. A summit to end the food crisis was held in Rome and discussions were held. The entire world leaders were unanimous at least on a point that, if they fail to feed the poor population of their country, the very roots of democracy would be at stake. We cannot allow vehicles to run at the cost of hungry people. We cannot follow the American pattern where 15% of the land is used for bio-fuel. They even destroy their farm yields to maintain market price. This is causing serious food scarcity all across the world. Such is the magnitude of problem. India is not an exception to it. If we follow the European and American model with closed eyes and folded hands, we will have to face much harsh and tough times in years to come. The bio-fuel is not only a fuel of vehicle; rather it is the blood of poor people across the world. 

Therefore, it is the right time when our policy maker will have to think twice and thrice that what ways they would evolve to lessen the gap between rich and poor. The glaring and abhorring contradictions in the economy would mar all the achievements which we had made during these years. If rich are moving in lememosine, the poor should be allowed to move in the buses also. If the HNIs spend crores on wedding, the daughter of poor should not be allowed to be sold due to economic hardships. Corporate Hospitals are here to cater to needs of big businessmen and babus, but Government Hospitals should also properly run so that no one dies for want of life saving drugs. Sky soaring buildings of Public Schools with air-conditioned class rooms are no harm to the society, but government schools should have at least wooden benches and hand pumps. The mushroom like growth of English schools in every streets of every town and city are perhaps due to failure of government educational institutions. It is said that if legal ways are closed, people take recourse of illegal means. Similarly when government fails to deliver, so called NGOs come and usurp the position hitherto legally meant for government agencies.

If India has to stand tall amidst the developed Nations, it has to ensure that the sharp differences are blurred and gaps plugged, or else we will go on creating ‘oasis’ in ‘deserts’.