The Indian Economy Dichotomy: Where Are We Headed?

Posted on November 16, 2011 in Business and Economy

By Mukul Jindal:

One might remember the new proposed benchmark set for the poverty line(Rs 25 a day for a villager and Rs 32 for a person living in the city), which has already been approved by Prime Minister’s Office. Even though inflation is nearing double — digit mark in the country, the updated regulation by the Planning commission seems unrealistic and comes as a shock for the masses. In a time, when International Poverty Line decided by World bank is $1.25 per day (roughly Rs. 61.40), the government continues to ignore the common man. Though urban rich class is contributing to the fast growing economy and the nation’s GDP (top 10% of India’s population earns 33% of the income), but the ugly truth is 37% population of India is still poor (According to Tendulkar committee report, accepted by Planning Commission Of India) and even after 64 years of Independence, more than 1/3rd of population still finds it hard to fill their belly and cover themselves.

India is considered as one of the next superpower emerging from the “Third — World countries” and its economy showed enormous growth after the “free market”principles were implemented in the country by the then Finance Minister Dr. Manmohan Singh in 1991. India boasts of 54 billionaires (Forbes list of billionaires) and for the year 2011, India’s economy is expected to grow by 8.1% only after China. Although the Economy has flourished in the past 20 years, but the growth in its parts is really uneven. States like Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Orissa, West Bengal, Rajasthan, and Uttar Pradesh remain untouched by the development and a rough estimate suggests that of all the poor population residing in the nation, 2/3rd resides in these 8 states. The concentration of the B.P.L population suggests even after the growth of the economy is touching milestones every year but still some parts of the nation remains untouched. Within the country there are parts like Gujarat and Orissa which geographically lie in the same nation but show a stark difference when it comes to the literacy rate, poverty, rise in economy and other facilities as well.

According to an excerpt from an article dated 9 September 2010 “There’s an expectation of bumper crop production; the immediate worry remains where to store the grains. India, the world’s second-largest rice grower, may reap a bumper harvest of 100 million metric tons in 2010-11, up 10% from a year earlier thanks to more plantings in productive regions and better adoption of high-yielding seeds. Summer rice planting until Sept. 2 rose 6.6% to 31.87 million hectares thanks to normal monsoon rains, official data showed. “But The World Bank estimates that India is ranked 2nd in the world of the number of children suffering from malnutrition, after Bangladesh (in 1998), where 47% of the children exhibit a degree of malnutrition.

The Economy is developing but Indians are poor, India is having bumper crop but the kids are dying of malnutrition. Do two different sectors co – exist in the nation of which one is touched by the welfare and the other is not? Is the growth on papers reaching the common man? Have we continuously chosen to see what the administration wanted? These are some silent questions which needs an answer. Where are we heading?