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