Академический Документы
Профессиональный Документы
Культура Документы
STEPSUNDERTAKENTOREDUCE
POVERTYININDIA
Thegovernmentspolicy,asreflectedinvariousplans,hasallalongbeen
thatoftheremovalofpoverty.
Forthis,theproblemofpovertyhasbeenconceivedasoneoflow
productivityofthepoor,whichstemsfromthelack/inadequacyof
work/employment,asalsofromlittleandpoorequipment,andalmostnil
infrastructuralfacilitiessuchascredit,marketing,etc.
(i)GeneralGrowth:
Thisisconcernedwiththemouldingofthegrowthstrategyinamanner
thathashelpedtosomeextentinimprovingtheconditionsofthepoor.
Thisinvolvedsucharestructuringoftheproduction,andofproductmix,
thatprovidedmorework/incomeandmoremassgoods,tothepoor.
Inconcreteterms,thiswasattemptedalongthefollowinglines:
expansionofagriculturalandnonfarmactivitiesintheruralareas,asalso
ofactivitiesintheunorganisedsectorsintheurbanareasadoptionof
labourintensivetechniquesenlargedproductionoffoodgrainsandother
itemsofnecessities,etc.Allthesetogetherwiththedevelopmentofother
sectorslikeindustries,etc.,weresupposedtobenefitthepoor.
However,ithasalsobeenrealisedthatthesemeasuresareby
themselvesnotsufficientforthepurpose.Thisawarenessbecameacute
inrecentyears,whenitwasfoundthatthetrickledowneffectsofthe
generalgrowthhavebeenoflittlehelp.
(ii)SupplementaryMeasures
Anothercategoryofmeasuresrelatestotheprovisionof
cheap/subsidisedfoodgrainstothepoorthroughtheTargeted
PublicDistributionSystem(TPDS).PDSwasredesignedasTPDS
higherratesofsubsidiesweregiventothepoorandthepoorest
amongthepoor.
Asaresultofthesegovernmentefforts,someimprovementshave,
infact,beeneffectedinthesituation.Aspertheestimates(byNSSO
61stSurvey),thepercentageofpoorbelowthepovertylinehas
fallenfrom54.9percentin197374to36percentin199394and
furtherto27.5percentin200405.
Thereisagainsomeprogressintheprovisionofproductiveassets
andfacilitiesofproductionforthepoor.Someadvanceshavealso
beenmadeinraisingtheskillandhealthstatusofthepoor.
Whileallthesemeasureshavehelped,thelastingsolutiontothe
problemofpovertyliesonlyintheframeworkofanexpanding
economyanddynamicagriculturalsector.
Abudgetthemeofopeneconomy,marketsandpovertyreduction.
fitsnicelywiththegrowthexpectationsunleashedbyPrime
MinisterModi.Also,thesearethethreelegsforequitablegrowth.
OpenEconomystance
Since1991,anOpenEconomypolicystancehasbeen
consistentlyfollowedinexternaltrade.Theproblemis,Indiahasnot
benefitedasmuchasourneighborsinEastAsia.Thefaultisclearly
ourown.
Ourgovernmenthasnotseizedopportunitiesoverseaswhichcould
bedovetailedwithdomesticcomparativeadvantagetomakethe
economypartofglobalvaluechains.Thisbecomesvitalnowifjobs
aretobeaddedinIndia.
Therealissueiswhatwemustdonexttoopentheeconomyto
bothdomesticandinternationalcompetition.
Fourstepsaresuggested:
1.
Linkingmarketsphysicallybyafirstrateinfrastructuregrid
ports,roads,railandelectricityarekeytocreatingaseamless
nationalmarket.
2.
Adigitizedtaxgridthatlinksnational,stateandlocalleveltax
systemstoenhancerevenuesthereductionoftaxevasionandthe
reductionoftheaggregatetaxburdenbyavoidingthepancakingof
multipleautarchictaxes.TheongoingGoodsandServicesTax
(GST)initiativebarelyscratchesthesurface.
3.
Aggressiveprivatizationofstateownedenterprises,includingin
armsandammunition,asModihasjustannounced.Thiscanprovide
therequiredbusinessmomentumforcompetitiveness,assistin
reachingfiscaldeficittargetsandbenefitconsumers.
4.
Openingofhithertocloseddomesticmarketsinland,legaland
mediaservicestoforeigninvestment,exceptwhereconsiderations
ofnationalsecurityexist.
TheFinanceMinistercouldsignalasecondwaveofliberalization
andreformtofollowuponthe1991wavefocusingonsupporting
Indianbusinesstoreapthebenefitsofanopeneconomy
internationally.
SOMEECONOMISTSHAVEPOINTEDOUTTHATTHECURRENT
GOVERNMENT'SSTANCEHASCHANGEDTOWARDSGREATER
ROLEOFTHEMARKETS
Livingbymarketlogic
TheBJPhasalwaysenjoyedthetrustofbusiness.Curiously,thepartys
commitmenttoexpandmarketsandcompetitionisnotdeeplyingrained
enough.
Instead, there is a lingering fondness for using and growing the already vast
powers of the state to bypass markets and to advance fast-track development
in a top-down Developmental State mode.
Endingpovertybycreatingjobs
Theinternationalconsensusonpovertyreductionisthatstrategiesthat
allocatemoreresourcesforhumandevelopment,livelihoodsandprivate
sectoremploymentworkbest.
Indiahaslaggedinenhancingbudgetaryallocationstoeducationand
health(includingwaterandsanitation),ascomparedtoanyother
growthorientedsectorsoftheeconomy.
Ifthislogicisfollowed,thesmallandmediumscalemanufacturingsector,
ratherthanmegaprojects,shouldbethefocusforjobsandpoverty
reduction.
Wemustavoidthetrapofsubvertingthegrowthagendaintoglitzybut
suboptimalactionpoints.
Togrowjobsforthepoor,itisthesmallthingsthatcount,likeremoving
municipalandpoliceharassmentofstreetvendors,simplifyingtax
assessmentprocessesandproblemsolvingbygettinglocalandstate
governmentsingrowthmissionmode.
Indiaseconomyconsistsof10%oftheworkforceinthelarge,formal
sectorand90%intheinformalsector.ThekeydialecticofIndiaisthis:
ThelotofemployeesinIndiasinformalsectorcanonlybeimprovedby
facilitatingemployerstogrowtheirbusinesses.
BJPGOVERNMENTHADGIVENINDICATIONINITSMANIFESTOAS
TOWHY
whyGrowthisFundamentaltoIndiasProgress
EarlierissuesoftheSignhavediscussedtheneedforIndiatounlockthe
potentialofitspeople,itsresources,itsentrepreneursanditsgovernment
inordertorealiseitstrueeconomicpotentialThepoliciesimpliedbythis
approachhavethepotentialtoaccelerateIndiasGDPeconomicgrowth
todoubledigits.
ForIndia,GDPgrowthismorethanjustanumber,itisalsoaproxyfor
developmentindicatorssuchasproductiveemploymentandpoverty
reduction.
Forexample,Indiahasmadethemostprogressonreducingpoverty
duringtheperiodsofrapidgrowth.Indiatodaystillhasanestimated
300mlivinginpovertyandeconomicgrowthisafundamentalnecessityin
ordertocreateopportunitiesforthem.
Indiatodayneeds@.10%growthsimplytomaintaincurrentlevelsoutput
perworkforceparticipantgiventhenumberofyoungstersenteringthe
labourforceinthisdecade,andevenfastergrowthtosolvetheissueof
underemploymentinitscurrentlabourforce.
Moreover,thispaceofgrowthneedstobesustainedoverthenext
severaldecadeswith250mmorepeopleexpectedtoenterthelabour
forceby2030
Creatingandmaintainingtherequiredlevelofdevelopmentwillrequire
morethanjustshorttermstimulusmeasuresitwillinvolvefundamental
transformationofIndiasproductivepotential.
Finally,growthisnotjustcriticaltoIndiaeconomicallyandsocially,itis
criticaltoIndiasleaderspolitically.Achievinghighratesofeconomic
growthisalsothebestwayforIndiaspoliticianstocounternatural
antiincumbencytrendsandthereforethebestwayforthemtoensure
politicalstabilityandcontinuityatboththestateandcentrallevels.
Themostobviousexamplesofthisarethestrongpositionsenjoyedby
leaderswhohaveemergedinstatessuchasBihar,MadhyaPradesh,
TamilNadu,and,ofcourse,
Gujarat(thehomestateoftheBJPsprimeministerialcandidate,Mr
NarendraModi)anddeliveredhighgrowthfortheirconstituents.
ThebestwayfortheincominggovernmentandIndiasleaderstoensure
successistomaketangibleprogressoncreatinganeconomicsystem
whichallowsallIndianstofeelthattheyhavetheopportunitytorealise
theirpotential.Creatingsuchasystemgoestothecoreofthemany
challengesofthehugeandcomplexdemocracythatismodernIndia.
IncaseyouvelosttrackofthedebatebetweenNobelPrizewinning
economistAmartyaSenandJagdishBhagwati,professoroflawand
economicsatColumbiaUniversityinNewYork,heresaFriday
briefingoftheconfrontation,whichhastakenonapoliticaldimension
inrecentdata
Inthesocialspendingcorner,Mr.Sen,whosaysthateconomic
growthmustaccompanysocialimprovementandgovernmentmust
spendmoneyoneducation,healthcareandfoodsubsidyprograms.
Thetwoeconomicheavyweightshavesluggedtheissueoutbefore.
Butthistime,bothofthemhavebookstosell.
Mr.BhagwatiwrotetoTheEconomistnewspaper
inmidJuly
criticizingthecentralassertionofMr.SenandJeanDrezenewbook
AnUncertainGlory:IndiaanditsContradictions,thatredistribution
hasledtorapidgrowthinAsia.
Thatproposition,hewrote,hasnobasisinrealityandputsthecart
beforethehorse.
Growthhasmaderedistributionfeasible,nottheotherwayround,
theColumbiaprofessorswrote.
Incidentally,thepairarecoauthorsof,WhyGrowthMatters:How
EconomicGrowthinIndiaReducedPovertyandtheLessonsforOther
DevelopingCountries,publishedinIndiainDecember.
Economicgrowthisveryimportantasameansforbetteringpeoples
livesbutithastobecombinedwithdevotingresourcestoremove
illiteracy,illhealth,undernutritionandotherdeprivations,Thenlocal
mediainIndiapickedupthespatbetweentwoofthecountrys
greatestminds,andaflurryofopinionpiecesfollowed.
10
Somecomparedthedifferencesbetweenthetwoeconomiststothe
mainpoliticaldivideinIndiabetweentherulingCongressparty,which
hasalargesocialspendingprogram,andtheBharatiyaJanataParty
themainopposition,whosecampaignforelectionisledby
businessfriendlyGujaratChiefMinisterNarendraModi.
InasubsequentpieceforMintheadlined,Mr.Bhagwatipraised
Gujaratsdevelopmentstorybutaddedthathistheoriesongrowth
couldbeadoptedbyanyparty.
PREPAREDBYMRNARESHSEHDEVMAMPHIL
nareshsehdev200789@gmail.com
pocketc2,flat8c,keshavpuram,newdelhi35