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Day in and day out Indian government reels out statistical data on the growth of
GDP, per capita income and the consumption of steel, cement, electricity etc., the
various parameters of growth of a country. To a vast majority of Indian these are only
some numbers and has not made any material difference to their quality of life and
the path to poverty alleviation. This data used to be tool to bring about the rosy side
of government efforts. But now the Government has lost even this statistical tool to
save its skin. The release on Thursday, last week, of the advance estimates of national
income in 2012-13 by the Central Statistics Office came with numbers that will have
startled and worried most observers. The headline fact is that the growth of
gross domestic product at factor cost at constant (2004-05) prices is
estimated at merely five per cent.Whatever may be the fact, the answer to ' Is
India progressing or regressing ' is clear to any unbiased citizen of the country.
Concerns have been expressed that these numbers, given that they depend on
extrapolation from the first three quarters of the financial year, may be revised sharply
upwards later. That would be a hope worth holding on to if there were real signs of a
recovery in the real economy that observers could point to. However, there are few
such signs. Yes, corporate profits have been remarkably solid. But that appears to be
because of careful cost-cutting, and there is little or no sign that it is sustainable or
likely to be turned into investment any time soon. Leading infrastructure sectors
remain depressed; and the order books of major infrastructure companies are not just
empty, but actually emptier than they were at this time last year. These numbers,
therefore, should be taken seriously.
Let us glance the statistics of the three sectors of Indian economy: Agriculture,
Industry & Service Sector.
The government can point to the fact that the agricultural growth rate is 1.8 per cent
as partial mitigation of its responsibility. Last year, the growth rate of agriculture was
3.6 per cent, but this year’s rains were less regular and dispersed differently over time.
First, the point needs to be made that, for all this government’s vaunted rural focus, it
has been unable to insulate agricultural production sufficiently from the vagaries of
the monsoon; and, second, the fact that an increasingly irregular monsoon is a
consequence of climate change will become more of a concern as time passes, and yet
the government seems to think that this is an aberration, not the new normal.
Meanwhile, though services have declined sharply – to 6.6 per cent growth, from their
already depressed growth rate of 8.2 per cent in 2011-12 – the real problem continues
to be in the secondary, industrial sector; and here the government can hardly evade its
central responsibility. Industrial growth is 3.1 per cent, driven and kept low by a
manufacturing growth rate of 1.9 per cent. Indeed, all non-services sectors of the
economy except for power, gas and water have clocked growth rates between one and
two per cent. This has nothing to do with the headwinds of the world economy; it has
everything to do with a lack of reform, excessive crowding out, and an inability to make
investment seem worthwhile to Indian capital. India is paying a heavy cost for the
UPA’s incompetence in managing the economy.
India is now trying to adopt the best practices like the GST and direct benefits Transfer
which if properly implemented can do wonders in terms of development. However, the
problem with India is that whenever something new is being introduced it has to be
opposed by someone. Criticism is welcome only if it is healthier. Our political parties
are busy throwing light upon each other’s’ scams and corruption in their respective
ruling period. Of course it is necessary to blow the lid off the scams but in doing so the
progress of India is hampered. Now due to differences between State and Central Govt.
there is an absolute deadlock in case of GST. While satisfying the needs of all the States
the GST may turn out to be another complex tax system thus creating more confusion
rather than simplification.
Policy Paralysis is the major drawback which holds India back in spite of having vast
potential to be the Superpower.
The two important parameters, namely the reservations and subsidies are sharp
pointers to the failure of India's planning policy.
Reservations and Quotas: In 1950, the country started with the reservation
policy wherein schedule castes and schedule tribes were given a reservation of 15 %
and 7% respectively on the basis of social and economic status. After sixty years,
instead of these quotas coming down, the country has reservations to the tune of 50%
and some places even much more by additions from newer classes. In fact more
population groups are clamouring for additional quotas for themselves. Either the
number of people that falls in the quota criterion has risen or it is the boon of vote
bank politics Subsidies: If India were progressing the number of people in
need of subsidies for food, fuel as also the amount spent on doling out
these subsidies should have come down whereas the reality is just the
converse of this.
India certainly is on road to become an industrialized nation but sadly
the fruits of this industrialization do not seem to trickle down to its poor
millions. This raises a very serious question. Is India's planning on the right path?
Is this growth rate sufficient to alleviate poverty in a reasonable time frame, say two
or three decades? Or India will grow into an industrialized giant/behemoth wherein
a big percentage has to be content with poverty and live below subsistence level
existence as had happened in the developed world during the early stages of
industrial revolution. It is time the polity and planners brood over this concern and
come out with solutions that will bring the graphs of reservations and subsidies
sloping downwards at the earliest.
Alleviation of poverty has been the biggest concern and vote catching slogan in one
form or the other right from the day India became independent and embraced
democracy. With all the planning for growth, it could manage to achieve some
success towards industrialization in all sectors but the demon of poverty has stayed
on for a vast majority of Indian masses. So much so that even the elementary basic
needs like food, clothing, shelter, drinking water, medical care, education etc. have
eluded our masses after 65 years of independence and planning of economy.It is
definite that Indian governments and planners have gone wrong somewhere.
A cursory analysis of ground realities points out to