A TRILLION-DOLLAR economy with more than $220 billion in foreign reserves, favourable supply-side factors, demographic dividends and high domestic savings - it’s a perfect recipe for making India the investment destination for any prospective investor.
The other side of the coin: a dismal 2.2% growth in agriculture leading to distress in the sector and jeopardising the lives of 253 million Indian farmers. The result is suicides and decline in domestic food security. For the first time since the famed green revolution, India has been importing staple foodgrain such as wheat.
Add to this the 836 million (77%) of India’s population which lives on income below Rs 20 per day, with nearly 457 million working in vulnerable conditions in the informal sector with virtually no access to proper health, education and social security, and you get the classic Indian paradox.
This paradox is that while liberalisation has created new wealth, it has in the process widened the gap between rich and poor. The effect of reforms have not percolated down to the common man. It seems to have made life more difficult, with essentials such as food, clothing and shelter becoming very expensive.
If this trend continues, it will not only create social tensions but will also stall the Indian growth story. Clearly an urgent mid-term correction is imperative. The state needs to intervene and revive agricultural growth on high priority, help the unorganised sector and rejuvenate rural economy.
I believe that in the 21st century, agriculture will continue to be the most fundamental instrument for sustainable development and poverty reduction. Sadly, it has been neglected for too long. The government must implement the report of the M S Swaminathan Commission on the Farm Sector in totality. This is possible only if government targets a growth rate of 7-8% for agriculture for the next 10 years from the dismal 2.2% currently.
As the Swaminathan Commission report says: “The time has, therefore, come when we should focus on the well-being of the women and men feeding the nation than just on production. It is clear that the human dimension must be the principal determinant of agricultural policies and not just production in physical terms.”
The phenomenal growth in direct and indirect tax collections should be comforting enough for the Finance Minister and the UPA government to make this a Budget for the agriculture sector, unorganised sector and rural India.
This Budget should set right the anomalies of wealth distribution and enable the Aam Aadmi to have proper access to education, health and social security. Only then will the process of liberalisation be inclusive and sustainable.
The author is former chief minister, Andhra Pradesh