Wanted: Not merely growth, but integrated development

The latest figures from the Central Statistical Organization are worrying. The GDP growth for the third quarter (Q3) has dipped further to 6.1%, which is more than 2% less than the corresponding period last year. Most of the major sectors – primary, secondary and tertiary have performed below par. According to the Central Statistics Organization’s data, released recently, the farm sector growth fell from 11% last fiscal year (FY) Q3 to 2.7% this FY Q3. Similarly, the manufacturing sector grew by mere 0.4% when compared to 7.8% during the corresponding quarter previous fiscal, the mining and quarrying sector’s growth plummeted to –3.1% from 6.1% during the same period; the construction sector slowed to 7.2% from 8.7 per%. Experts point out that the poor performance is a result of “broad-based weakness across sectors and demand segments”. Investment rate, at 28%, has reached the lowest point in the last seven years.

When one talks of economic growth in terms of GDP it is invariably assumed that one is referring to development. Actually the two concepts are distinct, with development being the more comprehensive of the two. Growth does not factor in the distribution of the newly generated wealth whereas development is about inclusiveness of any such addition to an economy’s prosperity. Therefore, in India, the growth narrative often soft-focuses on, if not ignores, the rural India. Whatever “growth” has taken place, it is mainly urban-centric. This becomes clear from the various media reports and debates that focus on issues of immediate concern to the urban lobby – be it construction or bank rates. Issues like better agricultural inputs, infrastructure, health etc relating to rural areas often get blanked out.

70% of India’s population still lives in the more than 6,00,000 villages. Out of India’s more than 300 million below-the-poverty-line population 80% live in rural areas. The average rural consumer expenditure is Rs. 625/- as compared to Rs. 1170/- in urban areas. 53% of the total expenditure in rural households is on food, and only 10% on capacity building like healthcare and education. It is worse for the rural poor who spend 65% on food alone. It is clear from these statistics that there is a vast scope for improvement in various economic, health and developmental indicators, especially in rural areas.

Clearly, new models for sustainable development are required which should be inclusive, flexible and well integrated. Since both topography and demography are diverse in India, developmental tools should be appropriate for a specific region’s core competency in such a manner that its products are matched to the market demand. Further, it should be ensured that connectivity with the market is well maintained. Moreover, there is a need for ensuring technological sustainability in order to reduce wastage and production, transportation and storage costs; make operations fast and cost-effective, even as the products and services achieve higher quality levels, produce higher grade products and services. The process of upgrading these technologies should be easy and cost-effective.

The government should hone its policies to facilitate development of proper infrastructure in rural areas. One is not talking merely of roads and power but also quality educational institutions that would impart high quality professional skills needed for developing our rural areas. Admittedly, these skills will not be the same as those required for urban areas. Therefore, quality professional education should be made accessible and affordable to all irrespective of their socio-economic status. Occasionally, there has been a talk of aligning our IITs and IIMs to the needs of rural development. But this may be impractical for several reasons but primarily because these centres of excellence should be made more useful for Corporate India. For the rural areas a new system of professional education ought to be fashioned, which would help enhance productivity of rural labour force. It is estimated that between 2010 and 2030 more than 241 million people in working age group would be added to the existing labour force. A significant proportion of these would be from rural areas. The question is whether our present education system equips them to become productive assets in the rural economy. We need new-age homes and village communities with infrastructure that would be more in tune with the needs of 21^st century agricultural practices. For this we need specially trained professionals in architecture, engineering, medicine and other relevant fields in order to devise more efficient ways of using various inputs in the rural economy, viz., land, technology, capital etc. Obviously, incentives for continuous learning and evolution would be required in order to encourage innovations and improvements not only in the farm yields but also enhancement in various high quality capacities like storage and production of agro-industrial products. High quality and low costs should combine to meet demand for various value-added products and services – giving a boost to growth and development.

Schemes like MGNREGA are, at best, temporary anti-poverty measures. It is imperative that the rural-urban divide is reduced through measures that will have long-term positive effect on the development of relevant competencies that would generate benefits in terms of improved quality of work culture. There is also a need for ensuring equitable distribution and adequate access to energy and water in rural areas. There should be a more meaningful coordination and interdependence among primary, secondary and tertiary sectors to facilitate research and development of a wide range of products, services and skills. This would help the Rural India to make a better per capita contribution to the country’s development. For India to become a truly prosperous country with sound economic base, development of rural India is essential. Do we have the requisite vision and the will?

Published in the Daily Post dated March 6, 2012