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India Shining : Real or Contrived

- K. Sriraj

You must have read or heard of India Shining – The one by line that has become the buzzword in the pre-election scenario is something I am sure you must have heard. It showcases India’s progress and its gaining momentum on the path to join the club of developed countries. But read the following article to know whether the shine is real or contrived.

Arun completed his post-graduation in 2002 and has been searching for a job since then; all he could avail of were contractual jobs. The Railway Recruitment Board (RRB) exams assured a petty 30,000 p.a. but secure jobs were a Godsend. The unusually high competition (attracted more than 7 lakh applicants) and the slogan of "sons-of-soil" effectively nipped all his hopes. Today, instead of feeling that India is shining, he feels that there is only darkness in his life.

On the other hand, Megha has many reasons to be happy. Her dad, who is working in a leading MNC, gifted her a new Optra and her brother (again working in a MNC) gifted her the latest mobile phone on her birthday and she was able to get everything she previously shopped abroad in India. For her both India and her life are truly shining.

The real picture of India shining – growth without jobs. The contrast is striking if one were to remember that the NDA government had announced that it would create 5 crore jobs at the rate of one crore jobs per year. However, data released by the National Sample Survey Organisation (NSSO), speaks a different tongue. It shows that employment growth per annum in the country has come down from 2.7% in 1983-93 to 1.07% in 1993-2000. Employment in the organised sector grew only by 0.53 % during 1994-99 as compared to 1.2% during 1983-1994. Other indices reveal increasing unemployment. Unemployment measured on current daily status basis that had declined to 6.0 % in 1993-94 from 8.3% in 1983, has risen to 7.3 % in 1999-2000. So if there has been growth it has been without the concomitant increase in jobs at least in the organised sector. This might also be the result of the fact that 92% of jobs in India are in the unorganised sector whereas all official statistics concentrate on the organised sector.

All said and done, there is some truth in the fact that India is shinning (even if in parts). The Indian economy, for one, is growing very rapidly. According to the various agencies varying from the International Monetary Fund (IMF) to the Central Statistical Organisation (CSO), India’s GDP growth rate could vary between 7- 8 percent, if not more. The foreign exchange reserves are at over a billion dollars. The Sensex has breached the 6000 mark at least thrice. There has been progress on the Golden Quadrilateral Project (despite some hiccups in Bihar like Dubey’s murder).

The automobile sector has seen some exceptionally high growth rates during the current year. Sales of cars during April-November 2003 were 29 per cent higher than it was in April-November 2002. Motorcycles sales grew by 14 per cent. That of commercial vehicles was up by 34 per cent. Power shortages have come down from about 14 per cent to seven per cent. Travel time has reduced substantially. Turnaround (Time needed to prepare a vessel or ship for a return trip) at the ports and railway wagons has been cut down. The number of cellular phone users in November 2003 was more than twice that in November 2002. On an average more than a million subscribers are being added every month since June 2003. The Index of Industrial Production grew by 6 per cent during April-October 2003, which is higher than the 5.6 per cent growth recorded during the same months of 2002.

So, a natural question is - why this paradoxical situation? Economists have pointed out a likely reason that the growth being witnessed now is very skewed in favour of the services sector. The GDP today is dominated by this sector to the extent of 51%. Within this sector only few areas are pre-dominant like trade, banking & insurance, real estate. Growth in these sectors has not resulted in the ‘trickle down’ effect. The theory, in simple words, states that different sectors and economic sections benefit slowly from the initial growth impetus in a certain sector. Furthermore, any growth that is the result of income growth alone cannot create jobs.

What needs to be done to ensure that growth is accompanied by increase in jobs? The one panacea is to concentrate on reforming the agriculture sector. Agriculture, despite its shrinking share in the GDP, continues to be biggest employer (55% of the labour force) in India. It is still, what one prominent economist called it – the parking lot of the unemployed in the country. One sure-shot way of increasing employment is to focus on agro-processing. Another is to encourage horticulture, floriculture, vegetable production, animal husbandry and pisciculture. Tourism is another sector that needs to be nurtured. Amit Mitra, Secretary General, FICCI has been quoted in The Economic Times as saying that Rs I million in the travel and tourism sector creates 58 direct and indirect jobs. Encouraging Small Scale Sector can also add at least 36 million jobs over the next 20 years.

In conclusion, it can be said India shining is not a uniform phenomenon. Some sectors have performed extremely well. But this growth has not translated into jobs for the masses. What needs to be done is to help sustain this growth coupled with a policy that encourages growth in sectors an indirectly job generation. To paraphrase an old adage – If there is a political will, there is surely a way to balance growth with jobs.

Click on the links to view the articles :

	The Privatisation Conundrum
	Elections: Emerging signs of political maturity?
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	India Shining
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