Emerging India, Declining Agriculture and Disturbing Inflation

India is emerging as one of the most powerful economies at the global level. World Bank notes that India is the fourth largest economy in the world with an output of $ 4.17 trillion, based on 2010 figures measured in Purchasing Power Parity terms. India continues to remain the second fastest growing nation in the world. More and more businesses have been moving out of the country during the past few years to different parts of the world, expanding markets and establishing units.
India was a poor country at the time of Independence. During that time about 45 per cent of the people were living in poverty, with around three fourth of the population depending on agriculture. The industrial and business sectors were weak. The Britishers had already destroyed the social infrastructure, along with the well-functioning native economic systems. As a result the literacy rate in 1950-51 was only around 18 per cent, while the average age of life of people was little above 32 years.
The growth of economy after independence has been noteworthy. From being a poor country, India has emerged as one of the top four economies in the world, with lot of potential to move further forward. No other country in the world has made such a turnaround in a period of just sixty plus years in the contemporary history. India is now being increasingly looked upon as a model nation by the rest of the world, including the US and the Europe. A glance of the rates of growth during the past six years will indicate the higher performance of the economy.
GDP Growth Rates of India (2005-06 to 2010-11)
Source: Handbook of Statistics on Indian Economy 2010-11, Reserve Bank of India
The decline of growth rates during 2008-09 was due to the impact of the global crisis. It is important to note that the economy started recovering quickly since then and has returned to the growth path, even while the western countries are not able to come out of their difficulties.
There have been significant achievements in different fields of economic and social activities after independence, though there are many deficiencies and shortcomings. Earlier the London Business School estimated that there were 85 million entrepreneurs in the country, perhaps the largest number in the world. The figures relating to the latest Census reveals that the country is progressing fast in the field of education, particularly education for women.
India is not just another country. She is a civilisation, an ancient civilisation, acknowledged by many experts as most probably the longest living civilisation in the world. Ancient India’s contribution in diverse fields of human life has been truly remarkable. As a result she remained the most productive and prosperous nation for most of the time in the history. India could achieve so much as she had developed well – functioning systems suited to the ethos and experiences of her people.
But all that changed when the aliens started dominating and interfering with the native systems with the ulterior motives. The Indian economy declined fast during the British domination, as they distorted the functioning systems and looted the resources. As a result India had to lose her long-held supremacy in different fields. The agricultural sector with a history of more than 8000 years remained a noble profession in India and was admired throughout the world for superior practices and very high levels of productivity. The British policies destroyed this sector beyond comprehension. In a period of just fifty years during the first half of the nineteenth century, one third of the farmers had to move out of agriculture in the Madras Presidency due to their wrong approaches. Hence India that remained the most prosperous and sustainable economy for several centuries was made poor by colonial forces.
We can understand the progress of the country during the post-independent period only when we study India from a historical perspective. Hence the rise of India during the recent periods is considered by many as the ‘re-emergence of an ancient power’ that dominated the global economy for many centuries with her superior performance. Many scholars have pointed out that the western countries could emerge richer during the last five hundred years, only due to their narrow policies such as colonialism and globalisation. But in the case of India, it was always on the basis of her better performance and strong fundamentals.
Neglect of agriculture
It is unfortunate that our policy-makers have continuously failed to understand the ground realities and evolve a suitable framework for the all-round development of the economy after independence. Attempts are being made only to copy the western systems and models, without realising the need to understand the strengths and backgrounds of this age-old nation and her history. As a result there are serious failures in certain critical sectors, even while the macro-economic performance has been improving due to the initiatives of the people and character of the society.
Agriculture is the most important sector for any country. It is critical for a country like ours, where one-sixth of the humanity lives. But it is disappointing to see that the major failure of independent Indian economy is in the field of agriculture. It is true that the country has been witnessing reduction in poverty levels and increase in food production. At the same time, it is equally true that many hundreds of farmers have been committing suicides every year and more than one-third of people are living below poverty line even today, after eleven five-year plans.
Agriculture is fast losing its respect as a profession. Farming families are moving out to other vocations, with children of many agricultural families leaving their villages to cities and towns in search of better opportunities. Hence the future of agriculture looks bleak. Fortunately we have the man-power, resources and natural advantages that other countries do not have. But we have failed to properly plan and develop this sector, which is very important for us. Food security is a strategic aspect of national life. Unfortunately the required steps are not being initiated to improve the sector in the right direction.
Even now the per capita availability and in-take of food by citizens in India remain low. Hence it is necessary to increase production so that it could be made available to the required extent. Moreover it is the foremost duty of a civilised state to see that all sections of people in the country get food at reasonable prices so that no one goes to bed with a hungry stomach. It is imperative that the production of food grains and basic items are increased to the extent necessary, thereby making it possible for every man and woman in the country to take the required calories on a daily basis.
Disturbing Inflation
It is important to note that food prices have been going up continuously during the recent years. The prices of certain items goes up higher suddenly as witnessed during last year, making it difficult and even impossible for the common man to buy them. Continuous increase of food prices and unreasonable fluctuations make the life of people miserable. As a result the standard of living of people suffers. In a populous country like ours where the per capita income of the citizen is not high, it is essential to see that the prices of food items do not reach unreasonable levels.
Higher inflation rates are identified as one of the major factors affecting the growth rates of the country in the ensuing periods. Food inflation is a serious issue in more than one ways and it is the responsibility of the policy-makers to take the necessary steps so that food items required for life are available at affordable rates. A multi-pronged approach is necessary for solving the problems in the long run.
( Published in the Vellalar College for Women, Erode Souvenir released during the UGC sponsored two day national level symposium on “Food Inflation- A Perspective”, organised by the PG and Research Department of Commerce, Jan.19-20, 2012)