People's Democracy

Illusion Of High Growth Rates

K S Menon

THE UPA government claims that India’s economic growth for the last three years shows an upward trends between 7.5 per cent and 8.5 per cent. While the economic survey reiterates that the recent budget even promises to score a GDP growth of our country to 10 per cent in the coming year. But the naked truth that nobody can deny is that behind this higher growth lie India’s growing poverty, inequality, unemployment problem, agrarian crisis and social injustice. The policy makers priorities and programmes continue to be pro-rich, pro-MNCs and pro-west and as such India’s growth is not reflected in reducing poverty and improving the living conditions of the hitherto deprived sections of the overwhelming number of our population.

ECONOMIC GROWTH VS SOCIAL JUSTICE

Freedom is all about development and the development must ensure freedom from hunger, illiteracy, malnutrition and inequality. Along with jobless growth what is growing is the big gap between the rich and the poor. The UPA government had pledged to the people to correct this inequality and the National Common Minimum Programme (NCMP) was evolved to do economic and social justice for all. The government has, like all the previous discredited regimes, conveniently forgotten this pledge and what is dangerous and worse are that it violated its own NCPM, age old fair foreign policy and introduced pro-rich economic policies against the national interest duty endangering the security and integrity of India.

The Asian Development Bank looking at these anti-poor and anti-national economic policies in many of the Asian Countries pointed out that these trends are only helping few rich families in the region and the multi nationals and certainly not the poor. India’s growth is said to consist human fact. “When is labour absorbing and accompanied by policies and programmes that mitigate inequalities and facilitate income and employment generation for the poor, particularly women and other traditionally excluded groups.”

INCREASE IN UNEMPLOYMENT RATE  

The Economic Survey and the budget referring to the figures of the National Sample Survey state that between 1993 – 1994 and 2003 – 2004, the unemployment rate has increased for men and woman both in the urban and rural India. The official figures in this regard are that the rural unemployment rate rose from 5.6 per cent to 9 per cent for men and 5.6 per cent to 9.3 per cent to women, whereas the figures in the urban centres rose from 6.7 per cent to 8.1 per cent for men and from 10.5 per cent to 11.7 per cent for women.

India today has over 250 million youngsters between the age group of 18 – 35 waiting hopefully for job opportunities and all that the government can offer is an uncertain and vague 100 days work at Rs 500 per month under the employment guarantee scheme. In the current budget, the central government, contrary to its tall claims has reduced the allocation for the scheme to Rs 15570 crore from Rs 19350 crore spent year.

POVERTY & MALNUTRITION

The official figures themselves state that over 25 per cent of India’s population live in abject poverty. This percentage is arrived at by sticking to the official poverty line of income of Rs 368 per person per month in rural areas and Rs 559 for the urban areas. Independent research reports say that the poverty ought to be some what about Rs 840 per capita per month and at this level 85 per cent of rural India and 42 per cent of urban India is poor and as per international standard of $2 per day poverty norm even the figure of Rs 840 is lower. Now any one can judge the increasing trends of poverty menace in India, while our budget raises the banner of economic growth of 10 per cent.

A UNICEF report points out that India is the home to 1 in 3 of the world’s malnourished children. Although Sub-Saharan Africa and South Asia are the world’s epicentre of malnutrition, nearly half of the India children are undernourished compared with a quarter of those in the Sub-Saharan Africa. While the government claims to increase scope for mid --- day meals for children, the budget’s allocation now on the Integrated Child Development Scheme is low even to meet the Supreme Court’s directive to universalise the scheme.

DECLINE OF RURAL SECTOR

In the 1960/1970s as the green revolution was in motion, rural India received some measures of relief due to the remarkable contribution made by the farm sector. Post reform era switched over increasingly to IT sector and other service sectors and criminally ignored India’s agriculture. The agriculture supports over 70 per cent of our population but its rate of growth has come down to 2.1per cent GDP and as such, its contribution to national income is only around 24 per cent. The government wants to have a second green revolution and a growth rate of 4 per cent for agricultural without doing any worthy allocation in the budget for the sector. In due course the IT sector and industry may reduce the job opportunities due to hi-tech measures and in that context only an improved farm sector can sustain the economic growth. The US and Europe, where the farm sector is a business, ensure year after year added subsidies whereas India under the pressure of US and the MNCs reduced the subsidies in the sector so that the MNCs can export their products to India and can earn richly. In the current budget, despite the cases of malnutrition, the food subsidy has been cut by Rs 2000 crore. The government is well aware of the precarious conditions of our farmers in the village with suicide figures rising to over 50,000 since the last 8 years, yet the poor farmers are left to the mercy of the weather and money lenders.

PLIGHT OF THE PEASANTRY

Until July 2005 the government instead of raising the buffer food stock to strengthen the public distribution system and the food economy, exported surplus and now as the stock has come down, it imported over five lakh tonnes of wheat for which it paid at least Rs 300 per quintal more than the minimum procurement price paid to our own farmers. Such measures led to the debt – driven suicide of Indian farmers and profit maximisation for the MNC’s. Due to the crisis in the cotton sector in Vidarbha, Maharashtra, over 300 debt-driven farmers have committed suicide since June 2005 as the cotton prices have comedown from Rs 2500 a quintal in 1991 to Rs 1785 in 2005. Four villages – Shingnapur, Dorly, Lehegaon and Shivni Rasulpur are “up for sale” and some farmers’ kidneys are also for sale. That speaks volumes about the UPA government’s farm policy.

The budget says that up to Rs 3 lakh the rate of interest for farmer’s loan will be at 7 per cent against the concrete recommendation of 4 per cent made by the M S Swaminathan commission. Of late, the government has closed down several of the rural branches of the banks for which, among others high incentives are offered to bank executives and this trend can help only the greedy money lenders. The budget itself has confirmed by quoting the NSS that out of the total number of cultivators in the country, only 27 per has access to institutional credit whereas 22 per cent received credit from non-institutional channels. Clearly, over half of the Indian farmers are still pushed to the gates of the blood – sucking money lenders for loans. India will not be any where if such trends prolonged.

India can learn a useful lesson from the growth of the Chinese economy. Growth in the economy is primarily led by labour force participation and China has started its added attention to the rural growth, farm sector growth and increase of power of purchasing capacity with the farmers so that the economic growth, political stability and social security with equity not only could be sustained but strengthened. It is time that India aims at growth with development.