The only way is to reduce inequality in all sense and in all dimensions.

Perhaps the climate of perecption has changed this this time, as is reflected through the last State of the States conclave held in September 2007 organised by IndiaToday. Perhaps, today, ministers are not as ... as what they were descibed to be. Judging by the debate, ministers are aware of what needs to be done. That the only way for the economy to propel even further is for all sorts of inequality to be reduced.


In essence, to propel even further in development, India needs to take a conscious step to elminate inequality in all sense. As Gandhi says,

Only then can India really soar high and shine.

Politics of Inclusive Growth India Today October 1 2007 6-12

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State of the States conclave organised by India Today. As close as one could get to a national Development Council. ten chief ministers, onedeputy chief inister and ministers from three states dbated the causes of rising inequality and the need to push inclusive growth

India today editor-in-chief Aroon Purie set the tone for the debate when he said 'the good news is that there is growth but the bad news is hat, far from being inclusibe, it has increased inequality".

Finance Minister P. Chidambaram, in his inaugural address, pointe dout that "every squeare inch on Infia is ruled by states" and that the laws of economics would work in India, but all stakeholders must work together to find the country its place in the wrld.

agriculture, education and infrastructure the focus.

Lack of attention to agriculture and education the primary focus.

Parkash Singh Badal, chief miister, punjab: Our finance minister has painted a rosy picture of the country. But in reality, the position is the opposite. We have to plan for the lower, not the upper strata. i would request mr. Purie and mr. Chawla (editor of India today) to hold this meeting next time in a village, under a tree. We talk about these things in air-conditioned halls and even at the Planning Commission meetings. I have requested the members of the commission to stay for one day and one night in a village and then they will realise what is to be done. Our farmers do hard work. Yet they are under heavy debt. Why is it so? because the policies of the Central givernment are against the farmers. Agriculture is in full control of the Centre. What can we do in the states, say about fertilisers or diesel?

Painted a rosy picture? Elites like to paint. Indiastreet--> No mention on poverty and inequality.
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'We disperse industries to rural areas, invest in education and promote tourism. All this enables job creation." N. Rangasamy Chief minister, Puducherry
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"Mere spending does not mean development. A good delivery system and governance are imperative for any region." Virbhadra Singh. Chief minister, Minachal Pradesh.
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"We all talk about high griwth but it is like a train where only the engine is running without bogies and the people." Sushil Kumar Modi Deputy Chief Minister, Bihar

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"The biggest problem we should worry about is unemployement in rural areas. If this is not solved, there will be a revolution." Parkash Singh Badal.

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"Only 5 per cent of our population is vocationally trained. We need to make people employable to promote growth." ravi Parthasarathy, Chairman & MD, IL&FS

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... :Our theme this year is skill set upgradation for inclusive growth..... The oriblem is at the lower-end. We have a very large workforce. But 93 per cent of it is in the informal sector. We are working on pilot projects with the Rural Development Ministry for skill development of people below the poverty line and also with the textiles industry. We need to do more. We need to fill this gap through public-private partnerships.

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"Inclusive growth must be the sub-text of our developmental efforts." Mohammad Hamid Ansari Vice-President.

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"because of the special status given to some states, investment has fled some states. We should be compensated for this." Digambar kamat, chief minister, Goa.

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Mohammad Hamid Ansari

It was at the ninth session of the Indian National Congress at Lohore in 1893 that Dadabhai Naoroji commented : "the gratest quetion before you, the question of all questions, is the poverty of India. This will be, I am much afraid, the great future trouble both for the Indian people and of the British rulers. It is the rock ahead. " The situation was no different five decades later on the eve of Independence, as evident from Palme Dutt's observation 1946 "India is a country of poor people; but it is not a poor country. Between these two lies the problem of the existing social and political order in India.

Thus, a century after Dadabhai Naoroji's comment, the cock continues to exist and protends the great future trouble. the poverty of India is still the question of all questions. The successes of the Indian economy are good. We have had a real GDP growth of 9.4 per cent for 2006-2007 and an exchange rate per capita of &880. In purchasing power parity terms, the per capita GDP has climbed to around $4000. Our savings and investment rateds have increased. there was a gross FDI inflow of $19.5 billion in 2006-2007 and good reasons exist to believe that there have been productivity and efficiency.

The evident contradition perplexes obsevers and leads to two questions. One is-what does this mean for a large segment of our population? And two- what is the true wealth of our nation? Is it the national income and material wealth or are the people of India enabled and empowered- our true wealth? if it is the latter, the only mearue of national progress should be the quality of life of our people.

the sense of satisfaction at the maro-economic situation stand diminished with the realisation that 77 per cent of our population has an income of around Rs 20, half a dollar in exchange rate terms and $2 in purchasing power parity terms. This poor and vulnerable segments of the India population represents the broad caegory within which the dynamics of povery alleviation plays out.

We have a situation where the richest 10% of the the population account for slightly less than 30 per cent of the share of expenditure and the poorest 10 per cent of the populaion account for less than 5 per cent.

More than income inequalities, what are particularly worrisome are stark human development inequalities that adversely impact life chances and capabilities of our people.

We have many examples from around the world, and within the country, where public policy choices have ensured better human development outcome than warranted by the level of economic development. This was done through a cnbscious focus on income distribution patterns and ensuring that public spending on basic halth and education remained high. How does India rank according to these parameters? Public expenditure on education is around 3 per cent of the GDP and on health is around 1.2 per cent of GDP. This is low by any standards, and specially for the extent of poverty in India. Much more nerds to be done.

Mahatma Gandhi accepted that his idea; of equal distribution is not relisable. But he advocated equitable distribution as an achievable goal.



***India has to give its people the basic thing it needs. Health and education.

P. Chidambaram. Finance Minister.

I am a passionate advocate of the well-being of all states because if all the states are doing well, India will do well. Unfortunately, growth is not even among the states and within a state too, growth is not even.

One of the reasons wht the remarkable economic growth rate accross the country is critiseized in some quarters is because of the unevnenness of the process and the unevenness of the product. It is, the

There are states that are small and therefore,.... But each one of these problems can be attacked by applying logic, reason and good economics.

***It seems to me as if the answers are blatant. If it seems blatant enough in a Level 2 university development course, surely it must be for politicians and ministers who have far more training, ... and insight. What then is holding them back? Surely not this logic, reason and good economics that was mentioned about. Then it must be something more than logic.


I have no doubt inn my minds,,that in my lifetime we can abolish abject povert in India. It will take us 20 more years of splendid growth rates- growth rates of over 8 per cent, near 9 oer cent. If we can sustain it for 20 years, you will find that this country is a very different country from what it is today and what it was 15 years ago.

** However, can this growth rate be sustained... Look a other countries.

September 24

State of the states

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Shankkar Aiyar

history, you could argue, is the best teacher of political economy. the basic lesson political parties and leaders could imbibe from this is that getting it right does not require a post doctorae in rocket science. Development may elude he masses but the difinition of economic development is not elusive or mysterious. It is, as the textbook says, about getting the basic foundation right. very simply, promote agriculture by ensuring credit to farers and developing irrigation facilities, invest in infrastructure for cennectibity between fields and markets, spend on education and health to enable people to benefit from the opportunities and derive rebune from the resultant investments that will boost consumer cmarkerts.


**performance not perception

Inclusive inequality.

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India is expected to notch 9-plus per cent growth for the thrid successibe year. But a large section is not on the gravy train.

Money is nothing: character, conduct and capacity are everything George bernard Shaw in 1900s.

301 million, a fourth of the population (of 111 million) is living less than a dollar a day, below the low tide of poverty otherwide jargonised as BPL. Within SOuth Asia, India has 77 per cent of the poor. Contasrt this with another nugget. India is also home to 36 dollar-billionaires. At the height of the stock market boom, the wealth of just five individuals in the country exceeded $100 billion or 10 per cent of the GDP.

Our study (based on data from National Sample Surver Organisation- 1993-1994 and 2004-2005 reports on expenditiure and income) shows that jammu and Kashmir, inequality as measured by the Gini coefficient has gone up across the country.

The top 20 per cent of the population in urban India earns 56 per cent of the income while th bottom 20 per cent earns barely 3.4 per cent of the income. Indded, the top 20 per cent earns more than all the others put together..

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Simple assymetry- of education, skills, opportunity and physical infrastructure- is currently driving income and this expenditure inequality. As several studies have validated, lack of education creates an assymetry both in ability and skills leading to people being less employable or more employable. This enables those better skilled to earn better. But there is hardly any move to institutionalise skills training. India has only 12 000 vocational training institutes against China's 5 00 000.

Physical infrasturcture.
India has struggled to add 45 000 MW in ficve years while China adds nearly 70 000 MW every year.

States like Madhya Pradesh and Chhattisgarh have barelt 15 % road connectivity. This leads to income disparity between those living in ruban areas and those in rural areas. Lack of connectivity from, say fields to markets prevents farmers from getting better returns. lack of farm-to-fork chain systems results in produce being wasted.

This widens the distance between incomes earned from the real potential.

Juxtapose

pg 23 !!!! What the state has failed in.

A case for India Whining Bibek Debroy & laveesh Bhandari

Roughly one-third of all children in India are underweight. A survey in a private school in Delhi has found that roughly one-third of the children there are obese. Of course there is inequality in th country.