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India faces major crisis in its quest growth
Posted by Brij Bhardwaj on 26 April 2008
Is India becoming ungovernable with growth with stability becoming difficult if not impossible is the question which we should be asking ourselves, if we really care and have also believed that the country was moving towards becoming a serious economic power in near future. The economy continues to grow, but the rate of inflation is also moving up fast to undo the gains of growth.
Caught in a situation where rising prices of food grains and energy are pushing leading economies of the world towards recession, Indian economy seems to be very vulnerable if not shaky. We may not be heading towards a scenario where food riots start in different parts of country with poor finding it difficult to get enough to feed, but we are very close to a situation where poor in rural areas including marginal farmers, landless and those who survive by working for others are becoming restless and seriously asking if they have to resort to arms struggle as democratic means have failed to improve their lot.
India has made lot of progress in sunshine industries like information technology, hospitality and service industries, but has fallen far behind in agriculture, building infrastructure and providing basic amenities for people. Many may not like to admit, but the stark reality is that India achieved growth of eight to nine per cent while keeping inflation under control during the last decade only because our farmers were producing enough to feed people, thanks to the gains of the first Green Revolution.
The country seemed to be forgetting the role of farmers in nation building while we went ahead by making progress on the industrial front and services sector. The neglect of agriculture during this period is likely to cost us dear in days to come. During the rainbow period there was lot of talk about second green revolution, but no serious effort was made to bring it about. In the meantime the safety net built around large stock of buffer stock of food grains, network of fair price shops and others measures was allowed to be eroded if not abolished. The results of this shortsighted policy are there for all to see.
Much to our discomfort even the international situation has changed and the surplus of food grains produced by farmers in USA and Australia have disappeared with drought in Australia and diversion of land used for production of food grains to producing bio fuels. Under the circumstances there is no option for us but to go back to basics like working for a second green revolution. We are fortunate that there is lot of scope as Indian production levels are so low that they can be substantially raised if not doubled by providing inputs like nutrients in form or water for irrigation, better seeds and fertilizers.
But before this happens, the country will have to pay a heavy price for neglect of agriculture in the recent past. The basic lesson is that stock market indices, export surpluses or large collection of hard currency are of no use unless we have enough food to feed our people. Along with it will come more demand for better education, better health care, drinking water and other basic amenities. The Finance Minister P. Chidambram who only one month ago was talking about India having a luckly Finance Minister responsible for unexpected growth is now reconciled to sacrificing growth to contain inflation. But a lot more will have to be done if India is to get out of the current trap in which rising cost of energy , shortage of food grains and world-wide recession are raising doubts about our ability to grow in times to come.
If India has to get out of this trap we will have to improve our infrastructure, go ahead for second green revolution and change our perception of an economy on the march. Instead of looking at indices of stock markets or cold statistics of growth we have to ensure a better way of life for our people by providing them basics like roads, water and electricity. We have to work to end the rural urban divide to reduce the migration of population from villages to cities which in turn are turning them in slums and encouraging suicides in countryside.
Such drastic changes in approach and emphasis will require a basic change in our thinking particularly of politicians who so far are satisfied by playing caste or quota cards or by offering sops like free television sets, free power and cheap rice. We would be much better off if instead of offering cheap rice we improve mid day meal schemes for students to improve attendance in schools and educate our children. The shift from populism to real progress is not easy as it would not bring immediate returns, but this along will change factors like incumbency which leads to every ruling party in state or Center being ruled out of power after one term.
The choice before us is either to become long term players laying foundation for long term gains or those who shine for few months and disappear at the first sign of trouble like advent of drought or heavy monsoon leading to floods. The choice in a democracy is not easy but is necessary if India has to become a strong economic player in near future.
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