India Shining – Really?
“India Shining” - the infamous slogan used by the right wing in the last election unsuccessfully. India is progressing, there is a new level of confidence in it steps, and most of the people who have made well after India opened its economy in the early 90’s feel the upside. But India has always been a land of contradictions, one end there is 300 million people who live in abject poverty for whom having one meal a day is a monumental struggle and at the same time we have close to 300 million rich and middle class whose purchasing power is attracting every industrial conglomerate in the world to obtain part of their disposable incomes.
The proclamation of India shining depends on what segment of demographics you speak to, is it the IT or service worker who has increased his/her wealth or is it the farmers family whose sole earner recently took his own life. Number of farmers committing suicide in India is 48 per day now and this has increased significantly in the recent years. The lack of vital capital to have a sustainable livelihood is pushing a farmer to the brink. Overall India still has 70% of the population struggling to make ends meet and a considerable portion of them are also stuck in un-productive labor. On the positive side finally India is averaging over 6% GDP (http://en.wikipedia.org/wiki/Gross_domestic_product) growth consistently, recently it hit as high as 9%, which is phenomenal by any standards. India today is the 12th largest economy in the world and the official poverty level is at 27% of population compared to 51% in 1977-78.
The key for India to be shining would be the nation’s ability to provide upward mobility to its society based on productive work. Sixty percent of Indian employment is agriculture based and this sector contributes to 28% of total GDP of the country. This is too high a percentage of working population dependent on one occupation. The country need to raise its productivity levels dramatically to improves it GDP which in turn will create new capital to further invest in its infrastructure and human development. Comparatively only 2% of United States population is dependent on agriculture and their agriculture-output is more than India. Machinery usage can easily raise agriculture productivity, the question to be asked is why is still such high level of labor stuck here. This entrapment in non productive labor and capital unavailability makes it difficult for India to improve its standard of living. One is acknowledging this level of labor pool available but on the other hand India needs to have the right opportunity for the skill set available. India’s agriculture labor needs to be weaned away to manufacturing or service or technology jobs, and it needs to make this happen to successfully compete among developed nations.
India has still few decades to go before it can shine, as of now unquestionably it is rising. The rise is crucial and needs to be sustained for few more decades, the battle over poverty, infrastructure, healthcare, child labor can never be won in any country in absolute terms, it can only be contained. India currently is on the right track and at this rate will be able to significantly improve standard of living and quality of life for majority of its citizens in 15-25 years. India has finally embarked in a direction which though not perfect has achieved notable success, West & South India seems to have a head start over North East and Central parts of the country. Finally the per capita income (http://en.wikipedia.org/wiki/Per_capita_income) is rising too and was up by 8% in 2007, the poorer states like Orissa and Jharkhand actually hit 17% for last year. And though many may argue wealth is rising more unfairly, still annually close to 40 million people are making the transition to middle class in India. Basically India has doubled its per capita since 2000/2001, this rise is very critical and as the savings of its people rise, they will form the key capital for future growth of the country and can be used individually or collectively to improve infrastructure and education.
The recent wealth distribution has favored the educated and they in turn have shown significant innovation in their areas of work. The innovation and the skill set available will influence larger investment from corporations resulting in job creation. But note that in any society 50% of the jobs are always created by thousands of common folks whose entrepreneur spirit to innovate and create wealth forms the largest employer than any one organization. Disproportionate money is trapped in private land or assets and this is available to few millions today on top of the economic chain and they are the folks who are benefiting the most. India needs to un-tap its credit to the other 700-800 million of the population who are locked into either a debt trap from local moneylenders or they make an inherent choice to suppress their entrepreneurial skills for lack of credit availability. Today Grameena Banks and micro financing organizations are making inroads into communities and are making credit available to the poorer society. But the amount available through such channels is too still too small and has not reached the tipping point (http://en.wikipedia.org/wiki/Tipping_point) to positively impact overall progress.
India is on the right path and is rising and to sustain this rise and make the transition to a true developed country or “Shining Status” would be determined by it ability make credit accessible and provide relevant education to its people. For the next generation of entrepreneurs to take risk, innovate and create employment, credit access will be the essential factor. In addition, relevant educated pool of people will make the nation employable and help the entrepreneurs succeed. India needs its people to succeed and achieve their potential, a third of the billion people in India are under 15 and over 55% of the population is younger than 35, it is a young nation with the hunger to dream big. The path will not be easy as half of the young population lies in the poorest regions of India, i.e. UP, Bihar, MP and Rajasthan. It will be interesting to see how the new generation of leaders make policies and decisions to make their society better educated and have access to easier credit happen in the next few decades.
Poverty, crumbling infrastructure issues, child labor, infant mortality, etc, statistics of any such issues are highest in India compared to the rest of the world and can make people feel that India may never overcome its shortfalls or force attention on symptoms than the underlying issues. And Indians needs to accept that government of the country cannot directly make any of these problems go away lastingly. In the end the democratically elected policymakers can only make laws and protect its people by enforcing the law. The choice to succeed and do better lies in individual capability of people, elected governments need to make all efforts to help improve its human resources. India has done well in small scale in both credit access and education, a small portion of 60’s-80’s generation commitment to educate their children has helped a significant portion of the current generation to take advantage of the opening of the market. As for credit access, some of the pioneers of grameena bank come from India, organizations like SEWA (http://www.unesco.org/most/asia1.htm) have successfully made thousand of women and children climb out of poverty and establish their own businesses with no federal or foreign investment. India needs to look at the big picture and focus on scaling such success story and help its whole population get access to credit and better education. Only time will say when INDIA will SHINE, and this will depend on the current generation to take responsibility of their society, believing in hard work and adhering to its laws. However idealistic the last statement may sound, never in history has forced labor or disciplining of majority of its society to follow a way of life has worked. Like any country if the majority of Indians do the right thing per law and have access to credit and education, it can truly shine as people will be able to choose their futures and achieve their potential.
Labels: credit access, education, generation, India, poverty, rising, shining, society, wealth creation
