Balanced Growth is Essential for Democracy

https://www.thehindubusinessline.com/opinion/balanced-growth-is-essential-for-democracy/article30705183.ece

The fabric of democracy depends on the social and economic consequences of the amendments to the Constitution at a critical time in India’s economic history. Agitations have caused loss of lot of man-days and diversion of productive time.  Timing of change is important for the success of change. This article does not intend to discuss the merits or otherwise of the latest amendments to the Constitution – either Article 370 annulment or CAA. The focus will be on the consequences of the economics of democracy and not so much the politics.

In democracy, it is the voice of the people expressed through the electoral vote. We have seen that the vote bank rarely touched even 30 percent of eligible population. People who caste their votes have mostly been the less endowed and widely spread across all religions and castes and this has little prospect of change.

One of the world's largest democracies had to wait for its day to overtake china's growth rate as consensus doesn't come about without discussion and lot of deliberation. Centralised planning of the Maholnobis-Nehruvian model though conceived well to usher in socialistic pattern of society let off the principles of federalism to come up with an experiment with Niti Aayog whose results are yet to be on the dashboard of India. Development is more than growth.

Ethnic, cultural, and religious diversity apart multiple languages form the Indian Union. This diversity is both its strength and weakness. States formed on linguistic basis with some of them larger than several countries had uneven natural endowments, and imbalances in the dispensation of resources at the hands of central government.

Notwithstanding the average nominal growth of 8% between 2007-12, human development indices ranked India at 129. 12.1cr (2011) population is covered by 24.95cr households with average habitat population of slightly less than 5 per household. Poverty levels have gone down in rural areas from 50% in 1993-94 to 23% in 2016-17 and in urban areas correspondingly from approximately 32% to around 13%. Rural roads constitute 70.2% of the total length of roads across the country. Quite a few States have made CC roads instead of metal roads. As per 71^st round of NSS, Literacy levels too have gone up significantly to 69.1% by 2014.

Goldman Sachs' estimated an average of 8% per annum during 2016-20 notwithstanding the prevailing global turbulence. So did all the leading predictions from KPMG and McKinsey. Although the NDA government announced the goals of good governance and cooperative federalism, both remain still at the goalposts.

Unless States are taken on board in this second largest democracy of the world, prospects of sustained growth remain elusive. As at the end of March 2018, eleven of the twenty-nine States (now 31 and 7 Union territories) showed consistently high growth during the period 2014-18. If the nation were to attain the lofty goal of $5trn by 2024-25, the rest of 20 should also join the minimum 8% growth level. Bihar (14.50%), Chattisgarh (11.20%); Goa (14%), Karnataka (12.00); Madhya Pradesh (around 18%); Maharashtra (10.6%); Tamil Nadu (12.30%); Telangana (14.10%); Uttarakhand (11.20); West Bengal (16.10%) and a few North Eastern States like Assam, Meghalaya also lead the list. 

Government of India would do well to lend all support to these leading States and push the other lagging States through sustainable interventions in infrastructure, communications, transport and tourism without giving scope for them to feel a partisan approach. All the Global Investment opportunities should have equitable spread.

Vice President in a recent Address mentioned that 479 Parliamentarians are crorepatis. The State Legislatures also are crowded with such crorepatis. Latest Oxfam Report (Jan 20, 2020) laments “Economic inequality is out of control. In 2019, the world’s billionaires, only 2,153 people, had more wealth than 4.6 billion people.” The Report attributes this to gender inequality and unpaid Care work at home by women. The richest 1% have more than twice the wealth of the 6.9bn people.

One good suggestion for the Finance Minister at the right time: taxing 0.5% of the richer 1% for the next 10years would be equal to investment needed for 117mn jobs in education, health and elderly care. Good governance demands that these rich sections shall not receive subsidies of the order currently prevailing.

Availability of health services, supply of drinking water remains inadequate and costly. Availability of liquor, however, has enhanced adding significantly to the State revenues. Both are causes of concern for the future of a healthy democracy.

The World Bank projected that India, along with Brazil, China, Indonesia, South Korea, and Russia, will account for more than half of the global growth by 2025 with an average annual growth rate of 4.7 per cent between 2011 and 2025. While this prediction is likely to undergo change in the context of current slowdown not just in India but in all the major economies in the world, there is no chance for India to alter its growth vision.

Addressing the resource constraints (mainly water, energy, infrastructure and investing more in human development (mainly public health and education) is important to realize India’s growth potential. Consensual approach is the essence of a successful democracy. India does not have the luxury of being otherwise.

(All the latest data is sourced from the Report of the Ministry of Statistics and Program Implementation, Government of India, 2018: www.mospi.gov.in ) 

Inclusive Agenda

Dedicate the Decade to Women

Seven decades of Federal Republic made India sterner stuff. Optimists invariably look at the half full glass while pessimists see the other half that is empty. But in the other half lie the challenges and opportunities. This retrospect becomes necessary in the backdrop of the latest Oxfam Report on Inequality released on the eve of Davos World Economic Conference that just concluded, putting India in somewhat bad light.

India always proved its might and solidarity in every type of crisis. From Bengal famine and pestilence to fighting Pakistan, from Bhuj earthquake to Tsunami, continual floods of Brahmaputra, Ganges, and Godavari the huge diversity of the nation did not come in the way of overcoming all the crises.

India’s growth and poverty reduction with by far the second largest population in the world, has contributed even to reducing global inequality. Famous economist Surjit S. Bhalla is the first to differ from the international wisdom and establish that ‘if poor defined as fraction of population in 1980, then for each 10% rise in consumption by the non-poor, consumption by the poor rose by 18%. Millennium Development Goals (headcount ratio) target of less than 15% poor by 2015 was reached quite ahead and only 10% of the developing world was poor. Such reduction, however, has no parity when it came to reduction of inequalities.

World Development Report 2000/2001 mentioned: the average income in the richest 20 countries is 37 times the average in the poorest 20 – a gap that doubled in the previous 40 years.

Union and State Governments have independently and together evolved schemes benefitting the poor and absolute poverty in India declined substantially. Poverty levels have gone down in India from 50% in 1993-94 to 23% in 2016-17 in rural areas and in urban areas correspondingly from 32% to 13%. The unrecognized fact is that even rural infrastructure in terms of roads constitute 72% of the road length of the country. These developments need not lead us to complacence as there is lot more ground to cover.

Oxfam Report 2020 highlighted two aspects: the gap between the rich and the poor and even among poor, gender inequality. 2153 persons had more wealth than 4.6bn people. Report on India omits to mention the political constituency that is full of billionaires. If the perverse subsidy regime has to be reversed, it should start from this constituency in favour of poor women of the country.

The wide divergence is attributed however to the underpaid and unpaid care work of women in homes. The Report patently ignored the intangible contribution of women in India – a culture of caring for home and bringing up the family to prosperity.

V.V. Giri, the fourteenth child of the family became the President of India and he married a SC woman who was also a poet. While this is not to mention that there was virtue in big family, upbringing of the child to the expectation of the Mother is still sacred in many a Indian home. Mother is the first teacher in the home. Monetising her ‘care’ is the value she creates for the human resource.

During the last three decades, influenced by globalization and imbibing western culture, the otherwise high value and culture of Indian youth suffered such care. Indian women demonstrated in the past a unique balance between home and work, whether in rural or urban areas. This balancing act is at the core of the ‘care’. The feminist and human values argued by the Oxfam report needs a relook at least in India. It is not right to belittle the role of Mother.

My Mother, who gave birth to six sons and six daughters, though studied only class V, studied the Indian epics Mahabharat and Ramayana, Bhagavatham and Bhagavadgita apart from several books in Telugu literature and learnt English with her children. She always used to say with pride that her contribution to the GDP of the country was substantial and lay in the NRI remittances of her two sons who went abroad and the grandchildren working in the Information Technology sector abroad, her other sons and daughters traveling throughout India at different points of time in the year either on leisure holiday or pilgrimage. The progeny of my parents is 100 and half of them are working in different parts of the globe. She brought us up when my father started his income at Rs.23 per month in 1936 of British India to Rs.250 per month on the day of retirement in 1974!!

Measuring women’s contribution to India’s GDP terming as one of the lowest in the world at 17% needs correction as GDP hides more than what is revealed. The issue, it rightly says, at one point is not just limited to women’s participation in the workforce alone.

Violence against women is another aspect that has been widely reported both in the Report and outside. There is also regional difference and across the castes in such reports. Dalit women were invariably the target and mostly in northern and western India compared to the rest of India.

Villagers invariably debate on the need for girls getting engaged in wedding at the age of 15-16 to provide security to them. It is not so much the unpaid care work of women that is the source of violence and to support such argument citing Krishnaraj report of 1990-91 EPW is perhaps a travesty of the current trend.

During the last three decades, self-help group movement has substantially gained traction in empowering women economically. Economic empowerment for sure is the best way of providing sustainable intervention in women development.

Of course, what needs correction certainly is to make sure that ‘40% of 15-18 year-old-girls go to school. Empowering women will be empowering the nation. It is this context that calls for reservation to women in every field to move to one-third of the population irrespective of caste or creed in the place of all existing reservations. Once this happens, women in SCs, STs, backward castes, and OBCs will automatically fall in the reserved category and would rectify the societal imbalance. If this decade is dedicated to women, 71^st Republic Day 2020 will write the future history differently.

*The Author is an economist and the views are personal. Published in Telangana Today on 25.01.2020