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Abstract : |
“….our administrators, political class, media, business world privilege accelerated growth over inclusive growth and the belief that the way to inclusive growth is through accelerated growth” ‘Inclusive growth can never take place without inclusive governance and the keen involvement of the rural population.’ |
1. The Eleventh Plan states: “GDP per agricultural worker is currently around Rs.2,000 per month, which is only about 75% higher in real terms than in 1950 compared to a four-fold (400%) increase in overall real per capita GDP.
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2. An indication of slowdown in farm incomes can be obtained by looking at the level and growth of agriculture GDP per agriculture worker (See Table below and the Note at the bottom). During 1970s Value added per worker in agriculture increased annually by 0.7 percent. The growth rate accelerated to 1.18 percent during 1980s. During the last decade agriculture GDP per worker increased merely by 0.29 percent.
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| Table : Level and growth in per worker agriculture GDP at 1993-94 prices |
| Period
|
GDP agriculture per agriculture worker
( Rs.) |
Growth rate in previous
10 years
(%/year) |
| 1969/70 to 1973/74 |
9049 |
|
| 1979/80 to 1983/84 |
9699 |
0.70 |
| 1989/90 to 1993/94 |
10902 |
1.18 |
| 1999/00 to 2003/04 |
11223 |
0.29 |
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3. “What is standing in the way of inclusive growth?” |
Mani Sankar Iyer asks and answers the question in the same breath, “….our administrators, political class, media, business world privilege (prefer) accelerated growth over inclusive growth and the belief that the way to inclusive growth is through accelerated growth as this combined with tax reforms substantially increases government revenues… The fact of the matter is that outcomes have been derisive ( deridingly low) in relation to outlays because the same government that believes in inclusive governance prepares centrally sponsored schemes which are implemented entirely by the bureaucracy or their collaborators the NGOs, but without the deep and active involvement of the beneficiaries themselves.”
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| The consequence, he points out, is that “we have over 100 mutually insulated silos delivering growth and welfare to the same set of beneficiaries. But, because of this, administrative costs go up hugely and convergence is not possible. That is the fundamental reason why Rajiv Gandhi, based on the single Planning Commission study of 1999, famously or infamously said that 85 paise in the rupee does not reach the poor.” |
4. Administration
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Aiyar goes on to explain that the current Planning Commission has come to a similar conclusion and puts the figure at 83 paise. “I think we can leave it to the experts to determine how many angels can dance on the head of a pin, but the fact of the matter is that 75 paise to 85 paise meant for welfare schemes is being absorbed by the administrative mechanism. I am not saying this is corruption, but just the system they have set up…” Instead, he advocates a systemic change in governance, where responsible administration replaces responsive governance. |
Aiyar’s other concern that comes out loud and clear is that though anti-poverty central spending has increased from Rs 7,600 crore to Rs 1,25,000 crore between 1994 and now, India has retained more or less the same position on the Human Development Index. “The same people who are brushing under the carpet that our relative position on the HDI has not increased are the very same people who are boasting again in comparative terms that ours is the second highest rate of growth. So, obviously, the high GDP growth is not translating itself into commensurate high HDI growth, with the consequence India is prospering, but Indians are not.” BL 091109-
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| NOTE : |
a. As agri sector GDP fell year after year since 1950s from 55% to 17% now, per capita income of agri workforce also dwindled sharply. Studies by the planning commission and others show that while the income ratio between agri workers and non-agri workers during 1951 was 1:1.8, it got widened to 1:5.2 by 2004. |
b. It is estimated by the Centre for Development Economics that whereas agricultural sectoral GDP stood at nearly Rs.3 lakh crore in 2002-03, it will rise to no more than Rs.4 lakh crore (+33%) a decade later in 2011-12 at the agricultural growth rate forecast for the Eleventh Plan. Meanwhile, the combined manufacturing and services sectors would have soared from Rs. 9 lakh crore to around Rs. 20 lakh crore (+120%), further widening the gap between the relatively stagnant sectors of the economy and the boom sectors from Rs.6 lakh crore to Rs.16 lakh crore. The disparity between agri and non-agri sectoral GDP is going to increase from 1:3 in 2003 to 1:5 by 2012. |
c. Thus in India, Rural Urban divide in incomes have widened five fold during the past 60 years. In the three decades since the country’s “opening up”, prosperity has come to urban India, but so has a widening income gap between urban and rural areas. Rural Indians constitute 70% of the population.
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d. The ratio of growth rate of agri sector GDP which was nearly half of (0.48%) of non-agri sector during the pre-green revolution period, increased to nearly 2/3rd (63%) during the Green-revolution period, but again went down to half level (0.51%) during the wider tech dissemination period and fell steeply to 1/4th (0.28%) during the Post-reforms period thus greatly widening the divide between the incomes of work force of agri and non-agri sectors. |
e. What it means in simple terms is that, ‘for everyone rupee growth in income of non- agri sectors, agri sector income grew by just 48 paise during pre-green revolution period, the growth rate in agri income sector has now further steeply declined to a megre 28 paise for every rupee growth of non- agri income sectors.’ KRSR/111109 |
