At present, India is the fastest growing economy [registering a growth rate of around 7.5% for two consecutive years viz., 2014-15 & 2015-16 and likely to be even higher during the current year as well] at a time when majority of economies – developed and developing – are either stagnating or caught in low growth trap. That makes us feel really very proud and confident.
An equally heartening fact is the increase in the number of high net-worth individuals [HNI: defined as a person having wealth of US$ 1 million] to over 200,000 during 2015 [from 180,000 in 2014]. That makes India home to ‘Fourth’ largest population of HNIs in Asia-Pacific [APAC] region. Together, these HNIs account for US$ 797 billion of wealth. This is 40% of India’s GDP at US$ 2 trillion [one trillion equals 1000 billion].
However, there is another glaring fact which makes us hold our head in shame. The Global Hunger Index [GHI] released by International Food Policy Research Institute [IFPRI] ranks India at 97 in a total of 118 countries. Even our neighboring countries viz., Bangladesh, Nepal and Sri Lanka are much ahead of us in the ranking.
Our country has the dubious distinction of having 15% population as undernourished – lacking in adequate food intake, both in quantity and quality. The share of under-5 children who are `wasted’ is about 15% while the share of children who are `stunted’ is a staggering 39%. This reflects widespread and chronic lack of balanced food. The under-5 mortality rate is 4.8% in India, partially reflecting the fatal synergy of inadequate nutrition and unhealthy environments. And, what is most appalling is that a mammoth 200 million people in India go to bed hungry every day.
Juxtapose this grim reality with a few HNIs or a tiny 0.016% of India’s population appropriating 40% of its GDP. It paints a very pathetic picture of a country that – for generations – has boasted of ameliorating the plight of the poor and bringing about a more equitable distribution of income. It makes a mockery of the “Garibi Hatao” [eliminate poverty] slogan given by our ex-prime minister Indira Gandhi in 1970s and a host of similar promises/exhortations made by successive political establishments.
The problem has been with the development model followed in the past. That was a model which focused only on overall economic growth per se assuming that its benefits will ‘automatically’ trickle down to the lowest strata of the society. The result was either we had slow growth [prior to launch of economic reforms in 1991, India was trapped in low growth syndrome of 2-3% or what was euphemistically described as “Hindu rate”] or even when growth picked up, it benefits were mostly appropriated by a select few.
At some point in the midstream, our policy makers realized the folly of what they were doing. To escape being hammered by the public at large, they instituted a plethora of welfare schemes to give direct assistance to the poor – both in kind and monetary terms – with a view to take care of their basic needs such as food, education, health etc. Unfortunately, these schemes were not properly implemented and even suffered from corruption and nepotism. As a result, the intended benefits did not reach majority of the poor.
They neither benefited from economic growth nor from direct intervention policies of government. No wonder, India has world’s largest food security program viz., “National Food Security Act” [NFSA] that seeks to provide food to 80% of its population at rock bottom price of Rs 1/2/3 per kg of coarse cereal, wheat and rice entailing mammoth subsidy of Rs 140,000 crores [2015-16] and yet, 200 million people go to the bed hungry.
It should also not surprise anyone that money siphoned off from the welfare schemes on a gargantuan scale would also be going towards unjust enrichment of select few. And, we have a deadly cocktail of few thousand HNIs co-existing with an ocean of poverty.
During his election speeches, Modi had vowed to eliminate the scourge of corruption. He had promised to implement welfare programs in an ‘effective’ and ‘transparent’ manner, plugging leakages and ensuring that benefit of state assistance reaches in full to the poor. To some extent, he has redeemed this pledge. During the last 2 years, by plugging leakages [mostly in LPG, food], he has saved about Rs 36,000 crores and restructured schemes to reach out to poor.
But, he has a long way to go. Hundreds of thousands of crores are being spent annually by way of subsidy on food, fertilizers, power and interest on bank loans and there are huge leakages. Removing these will not only require major policy shift [for instance, direct benefit transfer (DBT) in food and fertilizers] but also overhauling of governance structure particularly at the state level. Most of these are political decisions and things won’t happen easily and soon.
The present government has also endeavored to address the flaw in the growth model. Thus, by emphasizing on ‘inclusive’ development, its emphasis is not just on high growth per se but to do it in a manner that a vast majority of people are able to participate in the process.
In this regard, major initiatives include:
(i) Jan Dhan Yojna [JDY]: over 210 million persons opened bank accounts with deposits of about Rs 40,000 crores [;
(ii) Stand-up India: loans of up to Rs 1 crore are given to SC/ST and women entrepreneurs by every bank branch;
(iii) Start-up India: budding entrepreneurs are given loans to start new ventures in a hassle free environment plus fiscal incentives
(iv) Skill-India: training to young Indians to make them employable.
Each of the initiatives has the potential to empower people and give boost to small industries and businesses on a massive scale creating millions of jobs and increasing incomes. It can help in bridging the gulf between the rich and poor. But, to get results on ground, states need to complement center’s efforts in ensuring that these industries and businesses do not face any hassles in regard to basic stuff like land, power, water, fuel, labor, roads etc.
While, Modi has set the ball rolling in the right direction, institutions and administrative units at all levels should work for its gathering momentum. They should aim at a scenario whereby not only every Indian has access to food and proper nutrition but also ensure that he/she has a decent living.
The task is daunting but doable if only all key functionaries align their mindset with that of prime minister who in his first Independence Day address [August 15, 2014] declared that he perceives himself as “PRADHAN SEWAK” or principal servant.