It is the fact that India is one of the fastest growing economies of the world. Gross Domestic Product (GDP) grew at the rate of 9 per cent during the year 2007-08. In the previous two years growth rate had been 9.4 per cent and 9.6 per cent respectively. Despite the fact that the world is facing deep recession, we may still achieve a growth rate of about 7 per cent.
Government pats its back for the so-called unprecedented growth experience. What does GDP mean to an average person living in this country? If we have a look at the composition of GDP, it includes agricultural products including foodgrains, industrial products and services. On the one hand more of GDP should mean more of wheat and rice, more of cars and two wheelers and other industrial goods. It also means more of transport services, electricity, telecommunication etc. If we try to look into the factors leading to increase in GDP, we find that agriculture does not contribute to this growth experience. Whereas rate of growth of manufacturing and services had been above 10 per cent per annum, agriculture was lagging behind with an average growth of only 2.5 per cent in the last 5 years.
Industry is growing almost equal to the rate of growth of GDP and growth of services surpass all limits and as such the contribution of services sector to GDP jumps from 45.80 per cent in 1997-98 to 54 per cent in 2005-06, whereas gain of services is the loss of primary sector, contribution of which dips from 26.50 per cent to 18 per cent during the same period. Consequently, per capita production of foodgrains, pulses and edible oils show a declining trend. According to Economic Survey 2007-08, availability of foodgrain per capita per day which was 458 grams in 2002 declined to 412 grams in 2006 and pulses from 35.4 grams to only 32.5 grams during the same period. Per capita availability of edible oils declined from 9.0 kilograms in 1999-00 to only 7.2 kg. in 2002-03 and after that government deemed it fit not to publish these figures in the Economic Survey.
Consequent farmers? suicides
Farmers? suicides in the country since 1997 has touched 1,82,936 by December 2008. It seems there is no end to miseries of the farmers. So-called progressive states during the Green Revolution like Maharashtra, Andhra Pradesh, Karnataka and Punjab are some of the worst affected states. Relief package of Rs 5000 crore by the Prime Minister could not mitigate the problems of farming community of Maharashtra. This state again has crossed 4000 suicides mark for the third time in 4 years according to National Crime Records Bureau. In all 16,632 farmers have committed suicide in the country in 2007. Sixe 2002, the annual average of suicides has increased to 17,366.
Poverty and undernutrition
Under these circumstances how can we imagine any better position for the poor living in rural areas? National Family Health Survey conducted by Ministry of Health and Family Welfare also supports the hypothesis that vast majority of population is still reeling under poverty. The survey says that 46 per cent of all children are underweight and 38 per cent are stunted (too short for their age) and 19 per cent are wasted (too thin for their height). The Survey conducted three times in the past 15 years, concludes that some of these indicators have actually worsened over the years.
According to National Sample Survey Organisation (NSSO), nutritional intake of India is declining. NSSO says that during 1993-94 and 2004-05 calorie intake in both rural and urban India has declined by 4.9 and 2.5 per cent respectively. Protein intake in rural areas is down by 5 per cent. More than two-third of rural Indians and 70 per cent in urban Indians are reporting that they don'tget a full intake of 2,700 kilo calories, defined to be a minimum norm. The percentage of people reporting that they don'tget two square meals a day is still relatively large. The levels of undernourishment and malnourishment continue to be shockingly high as per the NSSO data.
The paradox of galloping growth and with deepening poverty in the country is explained by the phenomenon of jobless growth. No doubt GDP is rising and rising at a fast pace, but not enough jobs are being created. This has resulted in rising rate of unemployment in the country both in the rural and the urban areas. We note that the rate of unemployment which was 7.3 per cent in urban areas and 7.2 per cent in rural areas (males) in the year 1999-2000 as per 55th round of NSSO, which increased to 7.5 per cent and 8.0 percent in urban and rural areas respectively. Similar is the condition with regard to females where rate of unemployment increased from 9.4 per cent and 7.0 per cent in 1999-2000 year as per 55th round of NSSO to 11.6 per cent and 8.7 per cent in the years 2004-05 in the urban and rural areas respectively. The rise in joblessness in the urban areas should be taken as an extension of the rural displacement. Employment in the organised sector shows a decline from 172 lakh to 164.52 lakh. Much hyped organised private sector also shows only a marginal increase from 84.32 lakh to only 84.52 lakh jobs during 2002 and 2006. This clearly implies that casualisation of employment is on rise. Even the much trumpeted National Rural Employment Guarantee Programme could not produce any desired results. This has been conceded by Vice Chairman of Planning Commission.
Poverty reduction slowing down
We witnessed a high rate of GDP growth in the post 1991 period, which is claimed to be a big argument in favour of economic reforms. But, even the most vocal supporter of economic reforms, Montek Singh Ahluwalia, also concedes that reforms have not resulted in desired level of poverty reduction and decline in poverty is less than what the government had perceived. His confession is supported by the findings of NSSO 61st Round data, which clearly speaks out that in the post reform period the pace of poverty reduction has not only been much lower than the official assessments made after NSSO. 55th Round, it is also less than the actual pace of reduction recorded during 1970'sand 1980?s. Thus, it is amply clear that the high rate of growth of GDP recorded in the post reform period has not made lives better for poor in the same proportion. Rather, in the post reform period inequalities have accentuated as shown by higher ?Gini Coefficient? (a measure of inequality), which shows an increase in ?Gini Coefficient? from 28.6 per cent in 1993-94 to 30.5 per cent in 2004-05 for rural India and an increase from 34.4 per cent in 1993-94 to 37.6 per cent in 2004-05 in urban India. Most notable is the fact that it is a reversal of the trend seen in the previous decade (1983 to 1993-94). These figures imply that poor have fewer claims on growth and rich have taken the bulk of the benefits from the GDP growth. These figures are not only true for all India, but are applicable for almost all states except a few. If we go on riding this high growth, pro-reform phenomenon, it is an alarming signal for times to come.
Loan waiver: No solution for distress in agriculture
In the Union Budget 2008-09, the government announced a scheme of loan waiver for the farmers. With subsequent extension of loan waiver, a total of Rs 70,000 crore were allocated for the purpose. But despite this scheme, condition of agriculture and poor agriculturists is still not improved. In fact this scheme is applicable to loans dispersed by the banks and other institutions only. Mostly poor farmers don'thave access to such formal institutions. The government has so far not made any effort to address the problems of the farmers like provision of cheap credit, minimum support price for most of the agricultured products and other agricultural inputs at cost effective prices.
(The writer is member of BJP National Executive.)