Employment, Poverty and Productivity

The impact of economic liberalization on poverty levels in the country has been vigorously debated by economists and politicians over the years. The data seems inconclusive, and scholars often seem to arrive at conclusions suspiciously close to their own ideological proclivities. The broad consensus appears to be that poverty is declining; it is difficult to conclude that all the decline in poverty is attributable to liberalization and rapid growth; and the decline in poverty is less than what the free market enthusiasts hoped.

Growing Agrarian Crisis

As the Finance Minister gets ready to present the budget for next year, the sector which causes him the greatest anxiety must be agriculture. The past year has been relatively good in terms of rain fall and the Rabi yields should be encouraging. But in general, for over a decade now agricultural growth has been sluggish, stuck at about 2%. And there are four good reasons to be concerned about low agricultural growth rates.

Unorganized Sector – Intentions vs Outcomes

One of the great challenges confronting India is amelioration of the plight of the unorganized workers. NSS estimates show that about 370 million workers belonged to this category in 1999-2000. Of them, about 240 million are engaged in agriculture as owner-cultivators and wage labourers. Of the remaining 130 million non-agricultural workers, about 40 million are engaged in manufacturing, 37 million each in trade and other services, and the remaining in construction.

Manufacturing Holds the Key

 

Since the 1980’s India emerged out of the relative stagnation of the ‘Hindu’ rate of growth.  In the liberalization phase starting from 1991, these robust growth rates are consolidated.  India is now the second fastest growing nation among large economies. Global comparative studies indicate that our competitive advantage may continue for the next several decades, thanks to the young demographic profile, low cost economy, and large, ambitious, skilled manpower.

 

Competing Strategies for Combating Poverty

The greatest challenge before India today is combating mass poverty and making lives of ordinary people bearable.  If dignity is denied to an Indian in 2004 AD, and people are forced to be hungry even as foodgrains are rotting in warehouses, then that is unacceptable.  If in 21st century poor Indians suffer in monsoon from torrents of rain for want of shelter over their heads, or shiver in cold, then that is a disgrace to our republic.

Crisis in Education

“Today, more than ever before in human history, the wealth–or poverty–of nations depends on the quality of higher education.  Those with a larger repertoire of skills and greater capacity for learning can look forward to lifetimes of unprecedented economic fulfillment.  But in the coming decades the poorly educated face little better than the dreary prospects of lives of quiet desperation”.   These words of wisdom from Malcolm Gills, the President of Rice University in 1999 have great relevance to all nations today.  But nowhere in the world are they more apt than in India.

Stakes in Growth for All Sections

dir="ltr">One of the most contentious issues in public discourse in India is the quota policy (reservations) in favour of Dalits and other disadvantaged sections. Almost all educated Indians are divided on this issue of reservations on caste lines. In any group, the opponents of reservation are most likely to be caste Hindus who fear loss of opportunities, and supporters tend to be disadvantaged sections seeking more opportunities for advancement. Our Constitution-makers took great pains to make special provisions in favour of disadvantaged sections.