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POLITICS

A developmental vision for the future

“Poverty is the worst form of violence.”

— Mahatma Gandhi

At the time of Independence, India as a nation had an agenda of action set out. This included, apart from becoming a vibrant democracy, the removal of social inequality and backwardness of all kinds, and the achievement of economic progress and equity. However, after 60 years of Independence, for all the achievements in the political, economic, and industrial arenas, we still have around 250 million people in dire poverty who do not have access to education, basic health, sanitation, and clean drinking water.

Down the years, the political success of Indian democracy could not be repeated on the economic front. The advantage of achieving Independence could not be harnessed economically for a period of 50 years.

No doubt, India has succeeded in feeding a population that has almost trebled since Independence. But in terms of living standards we have not fared satisfactorily and have lost out to those Asian countries with which we were on an equal footing in the 1950s. China had the same per capita income and living standards as India in 1947, but today it is twice as rich and known for higher living standards. At the time of Independence many studies showed that with its abundant natural resources and effective rule of law, India was more likely to achieve better growth than that achieved by many far eastern countries.

Through its Five-Year Plans the government not only directed domestic investment into favoured projects but also told business what to produce, how, where and in what quantities. Its panoply of permits, licences, and controls not only controlled prices, imports, and foreign direct investment but created monopoly importers of raw materials, and monopolies in the provision of infrastructure in various sectors.

Myopic political interference, red tapism, and lack of accountability nurtured a large public sector, which became inefficient and an import-competing enterprise. In turn, the public sector failed to supply adequate infrastructure and lost a valuable opportunity in exploiting the advantages in the labour-intensive manufacturing sector, and our concept of a mixed economy ended up as a mixed-up economy. Apart from this, the government’s inadequate investment in the areas of both education and health resulted in the neglect of human capital, which increased the intensity of poverty.

The result was a dispiriting 3-4 per cent growth rate till the late-1980s that came to be known in economics as the “Hindu Growth Rate,” which subsequently resulted in unsustainable development and a macroeconomic crisis including a balance of payments crisis in 1991. The 1991 crisis made it an economic compulsion that the country embark on a reform process. This reform process brought in the de-licensing of investment, decontrol of business decisions, lifting of many import controls, encouragement of foreign direct investment, reform of the tax system and, above all, the liberalisation of capital markets.

These reforms brought in macro-economic stability and took growth rates to new heights. Since the mid-1990s, the economy has been able to register an average growth rate of 6.5 per cent to 7.5 per cent a year. For the first time since Independence, double-digit growth rates are closer to reality. But on the other hand, the level of poverty reduction continues to be very nominal.

The liberalisation process opened up new avenues to accelerate development in different sectors. But what really transformed the perception of Indian business and announced the arrival of India in world business was Information Technology. Widespread English language skills, a scientific temperament, a strong work ethic and cost-effective labour made it the hub for not only business process outsourcing but also knowledge process outsourcing. Success in IT created a ripple effect and spurred businesses in other areas, thereby contributing to the creation of “Brand India.”

In spite of all this, providing a stark contrast, farmers are committing suicide; hunger, disease, and poverty are prevalent all over the country, with a lot of damage done to the environment.

Liberalisation and reforms do not seem to work for the common man and for the environment.

In spite of economic reforms, the gulf between the rich and the poor and the urban-rural divide is only getting wider by the day, and the dividends of the reforms are not reaching the common man.

Nearly 250 million people in India continue to live below the poverty line, and 70 per cent of them are in the rural economy where the benefit of the reforms has not percolated.

In the recent past, the agricultural sector has registered a dismal 1.6 per cent growth rate and has been deteriorating, despite the fact that it provides employment to nearly 60 per cent of the Indian workforce. This is mainly on account of poor infrastructure, declining public investment including institutional credit, lack of minimum support prices, inadequate backward and forward integration, low value addition and low productivity which have increased the risk and uncertainty in agriculture due to globalisation and the World Trade Organisation regime. For the first time since the 1960s, India has started importing foodgrains. Apart from farmers, artisans also have been excluded from the process of liberalisation on account of lack of skill upgradation, absence of credit and direct access to markets.

The other reason for a large number of people remaining poor is their lack of access to basic health needs and education. In these areas India has lagged behind, compared to countries such as Sri Lanka and China.

The consequence of rural poverty was migration to urban areas, resulting in large-scale crowding of cities. The insecurity and vulnerability are pushing the rural poor to urban areas in search of livelihood. It is not only the poor but also the middle class that is finding it difficult to live in cities due to the rising cost of housing and other living needs. If the current trend of exodus persists, by 2025 half the population of India will be in the cities.

Promises to fulfil: Special emphasis on rural India, which has been left untouched by liberalisation, is needed

The economic growth in India during the last 16 years has not been participatory. In the social pyramid, there is an unprecedented level of consumption and opulence at the top, and remarkable deprivation, destitution, and oppression at the base.

The time has come for the country to look into the need for the development of an Alternative Economic Programme (AEP). The first and foremost task of an AEP will be to manage the contradictions that will make equitable growth a reality. This will be possible only if we can eradicate extreme poverty and hunger, achieve universal primary education, promote gender equality and empowerment, ensure environmental sustainability and adequate measures for the artisans to develop a network of positive partnerships within and outside the country.

Special emphasis on rural India, which has been left untouched by liberalisation, is needed. The renewal process needs to look into issues such as raising agricultural productivity, relieving debt distress, providing access credit, and increasing the coverage of extension activities.

Each of the above issues has larger scope in terms of what is to be achieved. The underlying principle for all this should be participatory growth cutting across all barriers.

The poor are to be made part of the development chain. This can be accomplished by proper and heavy investment in human capital, access to business capital, qualitative infrastructure, efficient and accountable administrative systems, and honing of skills and knowledge.

During my tenure as Chief Minister, I wanted to make Andhra Pradesh the foremost State in the country in terms of growth, equity, and quality of life. I developed a holistic and long-term plan with a vision to make it a poverty-free State by 2020, including a proposal to link the rivers from the Ganga to the Cauvery, which will not only help us tide over the cycle of famine and floods but strengthen national integration.

The Vision 2020 document envisages that Andhra Pradesh is a State where poverty is totally eradicated; where every man, woman, and child has access not just to the basic minimum needs, but to all the opportunities to lead a happy and fulfilling life; where there is a knowledge and learning society built on the values of hard work, honesty, discipline, and a collective sense of purpose.

This is true for the entire country and is a formidable challenge. And everyone in the country is conscious of it. India is at a threshold and Indians are confidence personified. We have with us a surfeit of opportunities that earlier societies did not have, to make India a developed country.

In this age of technology, nothing seems impossible be it the fisherman on the high seas using phones to realise the best prices for his produce, people in villages being treated by means of telemedicine from cities, education through new avenues including the Internet, and many more challenging opportunities.

Added to technology is enterprise and drive, which currently are in abundance in the country. Add innovation, a proactive government, and collaboration amongst the stakeholders; I am sure we have a successful recipe for equitable growth.

The time has come to fulfil the promises made at the dawn of Independence and prepare ourselves to meet the challenging tasks ahead, to build a vibrant and modern India filled with peace, prosperity, and happiness.