INDIAN ECONOMY: AN OVERVIEW

Economics experts and various studies conducted across the globe envisage India and China to rule the world in the 21st century.  For over a century the United States has been the largest economy in the world but major developments have taken place in the world economy since then, leading to the shift of focus from the US and the rich countries of Europe to the two Asian giants - India and China.

India is slated to become the third largest economy with a share of 14.3 per cent of global economy by 2018 and graduate to become the "third pole" and growth driver by 2035.India, which is now the fourth largest economy in terms of purchasing power parity, will overtake Japan and become third major economic power within 10 years.

A growth rate of above 8% was achieved by the Indian economy during the year 2003-04 and in the advanced estimates for 2004-05, Indian economy has been predicted to grow at a level of 6.9 %.  Growth in the Indian economy has steadily increased since 1979, averaging 5.7% per year in the 23-year growth record.

The Government has set up several committees with a view to pursue economic reforms that enable higher economic growth and generate more employment, while making the Indian economy more globally competitive. The Government has also taken several steps to revitalize the public sector and increase public investment. Two important institutional innovations have been the creation of the National Committee on Infrastructure, chaired by the Prime Minister, and the Investment Commission, chaired by Shri Ratan Tata. 

The economy is expected to grow at close to 7 per cent. To step up the rate of growth further, requires more investment in infrastructure and in agriculture and an improvement in government finances.

Economic reforms began in earnest only in July 1991.  The reforms of the last 10 years have gone a long way toward freeing up the domestic economy from state control.  Progress has also been made in many areas that were previously off limits to reforms.

The most important area of reforms is perhaps India’s power sector.  Virtually no sector of the economy — industry, agriculture, or services — can achieve successful transformation without adequate supply of power.  Infrastructure is another important area of reforms.  Roads, railways, and ports all need expansion as well as improvement in the quality of service.  Fertilizer and food subsidies pose yet another challenge.  As much as 0.7 percent of GDP goes into fertilizer subsidies.  Finally, the reform of bureaucracy is essential.  The problem of a bloated bureaucracy and the need for downsizing it is well recognized.  Moreover, the success of the reforms in delivering growth and poverty reduction must make the road to future reforms less bumpy.

The Government started to deregulate the areas of its operation and subsequently, the disinvestment in Public Sector Enterprises (PSEs) was announced.  The process of deregulation was aimed at enlarging competition and allowing new firms to enter the markets.  The market was thus opened up to domestic entrepreneurs / industrialists and norms for entry of foreign capital were liberalized.

ECONOMIC REFORMS

Economic Reforms are not ends in itself. Its success is appraised on the whetstone of whether it has been able to better the quality of life of the people for whom these reforms are meant. While one school of opinion avers that effects of reforms on the overall population of India will be slow and steady, critics say that reforms have made the rich richer and the poor poorer.

The reforms were launched at a time when in the words of Mr. Manmohan Singh, "it was recognised that the old economic instrument had become instrument of harassment, delay and corruption and had to be changed."

A bit of statistics that boost our morale during the last ten years that our forex reserves have risen from less than 1 billion dollar in June 19 to over 100 billion dollar now. From 140% of forex reserves in 1991 short term debt is 14% now. Our astounding success has been in the forex reserves and debt management.

But the miserably poor performance in a variety of fields that affects the common man has overshadowed our gains. Reforms have tended to bypass agriculture, the backbone of our rural economy as grain stocks has been eaten away by rodents in our godowns; people are dying of starvation. The decade of liberalization has witnessed the maximum- umber of suicides by farmers in Punjab, Vidarbha, Andhra Pradesh 2nd Karnatka.

Reform can succeed only if we go in for what he calls social renewal in the rural hinterland. Economic reforms have no meaning when we cannot provider schools, mid day meals for poor children, minimum health care for all, sanitation, safe-drinking water and power for domestic agriculture and industrial needs.

Let us not miss the message of those hundreds upon thousands of protestors who have been converging on several global meets in the last some years to focus on the ill effects of globalization. The ill-effects of globalization more applicable to India than any other country. India has still to go a long way to provide the minimum needs to the people.

The fact that we have the largest child labour force in the third world speaks volumes for our failure on two fronts, failure to check the birth rate and failure to universalize elementary education. Worse still, for the vast majority of poor, even education is a luxury. We can't build an economic super structure on weak social foundations.

POVERTY: THE WORST FORM OF VIOLENCE

    Today, I’m going to reflect upon a subject about which most of us feel extreme discomfort.  It’s a subject that we’d rather put on hold so we can think more upbeat, “positive” thoughts.  It’s a subject that involves many disturbing aspects of how humanity creates and maintains today’s version of civilization.

 Poverty is not only a symptom of economic inequality, but is a tool that is used to maintain economic and political inequality. People who possess great wealth, also have the luxury of exercising great political power.  This is not a new proposition.  We only need to look at historical examples.  Royalty and elite classes of people in all parts of the globe have had the greatest influence over the destiny of people belonging to other classes.

Once a person possesses power over others, that person is loathe to relinquish even a small share of it.  The most obvious result of this hunger to maintain and increase power is the presence of warfare. This might manifest in wars against other groupings of people such as international conflict.  And it shows up in the need to control fellow members of the same tribe or nation.

This method of control is quite effective.  It’s strength comes from the primal, survival instincts of the human animal.  Observers know that when a person is poor, he or she must concentrate on acquiring adequate food and shelter for oneself and family.  There is less time for obtaining educational enlightenment nor philosophical thoughts.  Mental energies focus on survival.  If there are other thoughts, they are of the type that cultivate resentment and anger.  Overall, the impoverished person becomes “invisible” to the more prosperous members of a society.

Those people who do not starve to death sometimes formulate reactionary movements and revolutions. As a result, the individuals who enjoy the wealth and power, must suppress and defeat the revolutions.  This struggle has been going on for many centuries across the world. It becomes the battle between those who can purchase political influence and military strength against those people who have nothing left to lose.

It will take a patient and wise group of people to steer us away from the abyss of totalitarian domination in the world. With advancing poverty, the struggle of power versus ethical compassion will be more difficult.  In the meantime, we all must work towards the elimination of all forms of violence.

Poverty also severely affects the development of any country. So,Poverty is a disease that should be completely eradicated if a country wants to develop and prosper. Education should be given the top most priority. It is only when you educate an individual can he be in a better position to contribute for the development of himself as well as for the country. 

“What a weary time those years were–to have the desire and the need to live but not the ability.”–Charles Bukowski

"UNITED WE STAND, DIVIDED WE FALL....."

INDIA, the country famous all over the world for its unique cultures and traditions. The country known for diversity in region, diversity in languages, diversity in food, diversity in clothes, diversity in festival, diversity in states, diversity in everything which uniquely represents it and it's people. So when we talk about our country, it is not just a particular state which is focussed upon but all the states together, which make our INCREDIBLE INDIA. However, this ceases to be the case and we are introduced to the sad reality of "REGIONAL IMBALANCE" that exists in our country.

Regional Imbalance lead to frustration, discontent and injustice. It can be said that the naxalism has spread to more than 100 districts including Maharashtra and Karnataka. Before the census 2011 Jammu & Kashmir and Assam were never included in any of the census which led to the feeling of unfairness and inequality. In state like UP communal tension is the result of regional imbalance. States like Maharashtra and Gujarat are favoured because of their physical location by the entrepreneurs whereas North Eastern states are completely isolated because of their remoteness, poor connectivity and hilly area. Also the states like Maharashtra, Gujurat, Andhra Pradesh, Uttar Pradesh, Tamil Nadu are ranking in per capita income compared to Bihar, Odisha, Rajasthan and North Eastern states. Punjab and Haryana are states which are high in agricultural development because of developed irrigation facilities and high fertiliser consumption compared to other states. Kerela, Lakshwadeep and all the union territories including delhi have literacy rate above 85% and on the other hand Bihar, Arunanchal Pradesh and Rajasthan have low literacy rate with average of 65%.

There also exists urban & rural disparities among states. Tamil Nadu is said to be the highly urbanised states. All villages there are 100% electrified. Goa is the next most urbanised state. All union territories including Delhi are higly urbanised followed by Kerela, Maharahtra and Gujurat. Kerela and Tamil Nadu have highly developed network of roads. On the other hand, Madhya Pradesh, Bihar and Rajasthan are not at all well connected through roads. Jammu & Kashmir and North Eastern States due to their hilly terrain have less developed road network. This data clearly shows how regional disparity has adversely affected our country.

It was felt that the state had a major role to play in removing disparities. This commitment was reflected in the Constitution and in planning objectives, but there was a drift away from these goals because of the strategic position of the ruling classes, and the macro and sectoral model of development which was adopted by our planners.Two major institutions, which were expected to work towards reducing the regional imbalances after independence, were the Finance Commission and the Planning Commission. Although the recommendations of the Finance Commission have aroused interest in regional disparities, it has not had much role to play. 

However, there are programmes implemented to reduce regional imbalances. The two programmes were 'Integrated Area Approach & Local Planning' and 'Spatial integration in sectoral plans.' The former programme includes hilly area development programmes which covers J&K, North Eastern States, development of horticulture, animal husbandry, wee keeping and soil construction. It also includes tribal area development programme and states covered are Gujurat, Jharkhand, Chattisgarh, Odisha, Maharashtra, Madhya Pradesh and Rajasthan. Special funds are allocated by the centre for preserving tribal rights. It also includes drought prone area development programme and covers states severely hit by natural calamities. The latter programme includes community development programmes, decentralisation of industrialisation and intensive agricultural development. 

A special fund centrally sponsored known as BRGF (Backward Region Grant Fund) is introduced in the 11th FYP to remove regional disparities.

Regional disparity is a major hurdle in the development of the country, It endangers the peace of the country. Hence, for an economy to be fully developed it is necessary to eradicate such evils completely from the country.

     "WE HAVE FLOWN THE AIR LIKE BIRDS, AND SWUN THE SEA LIKE FISHES, BUT HAVE YET TO LEARN THE SIMPLE ACT OF WALKING THE EARTH LIKE BROTHERS"                 

-Martin Luther King Jr

HOW POPULATION GROWTH IS INVERSELY CORRELATED WITH SOCIAL PROGRESS

The good news from census data on the size of religious communities is that all communities show a downward trend in growth. The bad news is the tendency to raise unfounded alarm over the rise in the share of Muslims, from 13.4% in 2001 to 14.2% in 2011, while the share of Hindus has declined 0.7% to dip below 80% to 79.8%. Of course, if the numbers are rounded off, there would be less drama, but even decimal points can be marshalled to propagate the thesis that Hindus are endangered. The reality is that population growth is closely and inversely correlated with social, particularly educational, progress. Backward Bihar has a decadal growth rate of 25.4%, 0.8% higher than the Muslim decadal growth rate.
   Demographer S Irudaya Rajan estimates the annual population growth rate of Muslims to have come down from 2.8% over 1981-91 to 2.6% over 1991-2001. The average for 2001-11 is down to 2.45%. The growth rate has come down faster for Muslims than for Hindus. What this shows is that overall social development, rather than faith, dictates how many children women have. In Europe, Catholic Italy has one of the lowest fertility rates and the fertility rate — the number of children a woman bears over her lifetime — has dipped below the replacement level of 2.1% in Bangladesh and Iran. This is not to say that faith plays no role or that social development alone is definitive in determining how many children are born. Among India’s backward states, Orissa has a very low population growth rate, while UP, Rajasthan, Madhya Pradesh, Jharkhand and Chhattisgarh, besides Bihar, all have decadal growth rates in excess of 20%. Jammu and Kashmir has a high decadal growth rate, despite high social development.
    The other pet peeve of the Hindus-under-threat brigade is immigration from Bangladesh. While the demographic data is not conclusive — the growth in Muslim numbers in Bengal is at a lower rate than in India as a whole — it is probable that migration does take place. This is true of any two countries with different degrees of economic opportunities.

DON'T FORCE US TO VOTE

Elections to local governments in India are seeing attempts to make voting mandatory in some states, with varying penal provisions being introduced to get citizens to the booth. Two private member bills referred to as the Compulsory Voting Bill, 2014 have been introduced by BJP MPs Janardhan Singh Sigriwal and Varun Gandhi respectively, to make a case for mandatory voting. Two previous bills to this effect were dismissed in 2004 and 2009.

  The US too has been rife with a similar debate ever since President Barack Obama in an address in Cleveland in March mooted the idea stating that “it would be transformative if everyone voted”.

   The Election Commission of India in reply to a public interest litigation had gone so far as to say that making voting compulsory violated the freedom of speech and expression. The Law Commission too held forth this opinion in its ‘Report on Electoral Reforms’ submitted to the law and justice ministry in March. “The Law Commission does not recommend the introduction of compulsory voting in India and in fact, believes it to be highly undesirable for a variety of reasons described … such as being undemocratic, illegitimate, expensive, unable to improve quality political participation and awareness, and difficult to implement,” it stated.

   Legislators who have participated in recent parliamentary debates, however, perceive it differently. They propose that mandatory voting is an effective measure to improve political participation through better voter turnouts. Further, it deepens electoral legitimacy, they argue. The practice, it is suggested, could also bring an end to the illegalities political parties indulge in to woo voters to the booths.

   In Karnataka where compulsory voting was applicable for the first time in the panchayat polls, no enforcement mechanism was put into place. Gujarat in its recently notified rules has introduced a fine of Rs 100 for voters who default in local body elections upcoming in October, with 10 categories such as senior citizens or migrants being exempted. India is yet to build the level of infrastructure that facilitates voting before we think of introducing such punishing measures.

  It is then pertinent to question why our democratic energy is wholly focussed on elections to the exclusion of other institutional mechanisms of citizen engagement. Isn’t engaging in urban ward committees and area sabhas or rural gram sabhas as crucial to a vibrant democracy?

  Moreover, why should punitive measures solely be directed at citizens? As MP Bhagwant Mann argued on the floor of the Lok Sabha when one of these bills was being heard on April 24, why shouldn’t there be a penalty on political parties if they fail to live up to their manifesto promises? Now that is sure matter for another debate.

"IT HAD NO IMPACT...." SHASHI THAROOR

Congress MP Shashi Tharoor has drawn much praise for his spirited argument at Oxford Union debate, demanding reparation payments by Britain to India for its 200-year colonial rule, which, he said, led to the crumbling of India's economy.

Even Prime Minister Narendra Modi could not resist himself from appreciating the exhilarating speech of Tharoor.

The motion for the debate was: “This House Believes Britain Owes Reparations to her Former Colonies” and Tharoor, along with eminent speakers from Ghana and Jamaica, spoke in favour of it. British and American intellectuals spoke in opposition.

Tharoor’s speech was widely appreciated in India because of the succinctness with which he illustrate how and why colonial rule exploited the subcontinent, and how violence and racism were the order of those days.

“It’s a bit rich to oppress, enslave, kill, torture, maim people for 200 years and then celebrate the fact that they are democratic at the end of it. We were denied democracy, so we had to snatch it, seize it from you,” he said to loud applause from the audience.

What’s unmistakable in Tharoor’s speech, though, is his sense of humour.

Sample this, “The Sun couldn’t set on the British empire, because even God couldn’t trust the English in the dark.”

Also, Tharoor argues against the opposition's arguments in a compelling manner.

Talking about railways in India, a development often described as a 'gift by the British', Tharoor said, "Roads and railways were built to serve British interests in India."

He added that many countries in the world have got roads and railways built without being colonised.

While the social media conversation on the speech has been mostly positive, some said that the same point had been made by others earlier. Though numerous conversations take place in public domain on INDIA's freedom struggle, very little happens about critically analysing, with data and facts, how much colonial rule affected undivided INDIA. Tharoor’s speech went a long way in explaining in easy-to-understand ways how colonialists ruined and exploited India. 

The main issues highlighted in the speech were-

1. How colonial rule ruined India's economy:

 “Britain’s rise financed by depredations in India,” said Tharoor, highlighting that through British rule, India’s share of the global economy fell from 27% to less than 2%.

He described how British rulers destroyed India’s handloom industry and turned the country’s “weavers into beggars”.

He added that by the end of the 19th century, “India was Britain’s largest cash cow, world’s biggest purchaser of  British goods and source of highly paid employment of British Civil servants”.

Tharoor told the audience that Indians paid fat salaries to the British officials only for oppressing them in return.

At the end of the speech, Tharoor said reparations should not be considered as a "tool to empower" somebody, but rather as a tool through which the British can "atone" for the sins of the past.

2. How wars affected Indian economy:

Tharoor said in World War I, one-sixth of all British forces were Indians and 54,000 Indians lost their lives.

In addition to that, he said, India actually funded these wars through taxes as well as supplied ammunition and garments.

Moreover, Indian tax-payers had to pay 100 million pounds at the time to bear the expense of the war.
The total value of everything taken out of India during the war, Tharoor said, was 8 billion pounds in today’s money .

Even in World War II, the cost that Indians paid was immense.

Tharoor said that of Britain’s total World War II debt of 3 billion pounds (in 1945), it owed 1.25 billion pounds to India, and no part of it was ever paid.

3. How the british never cared about starving Indians:

Explaining the available data on starvation in British India, Tharoor said 15 million to 29 million Indians died of starvation.

He further said four million people died in the Bengal famine of the 1940s because then British Prime Minister Winston Churchill diverted food supplies from famine-hit areas to Europe, only to be piled up as reserved stock.

When “conscious stricken” British officials wrote to Churchill, Tharoor said, he wrote back, “Why hasn’t Gandhi died yet?”