The biggest possible barrier to India's growth
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» Robust auto sales volumes in FY11
» The worrying factor of Gold ETFs
» Concerns on the US dollar intensify
» Corruption in India on the decline?
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Yet, this picture completely belies the state of affairs in India's rural hinterland. There, India's stupendous GDP growth has not made any marked difference to their standard of living. Poverty in these regions continues to remain a disease and highlights all the more the big economic and social divide in the country. One of the reasons that has made India an attractive destination is its so called demographic dividend. The idea is that the young working population will go a long way in bolstering India's growth in the coming years. But there is the other side to the story. One where India needs to actually find meaningful and gainful employment for its ever increasing population. That picture does not look very encouraging.
Take the Mahatma Gandhi National Rural Employment Guarantee Scheme for instance. This is a US$ 9 bn programme designed to create jobs through building infrastructure in a developing India's most-backward rural areas. But it has not really seen the success envisaged largely due to corruption. There are also complaints of new skills not being learnt which would enable workers to garner better jobs and improve their chances of lifting themselves from poverty.
Indeed, India's metros have seen remarkable progress and have led to the rise of the middle class whose standard of living has improved along with the country's growth. But this difference has to be felt in the rural areas too. Especially since it accounts for two thirds of India's 1.2 bn population. Otherwise, India will have to deal with increasing social unrest, which will surely thwart its attempts to take growth to the next level and discourage foreign investments.
Do you think that India's growth is making any difference to the rural areas? Share with us or post your comments on our facebook page.
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* Commercial Vehicles (Medium and Light)
# Utility Vehicles;
Data Source: SIAM
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Firstly, the near zero interest rates have been fueling asset prices across the world. Gold, silver, oil have all hit record levels. It has also pushed up inflation in emerging economies like India and Brazil, forcing these countries to either raise interest rates or to limit capital inflows.
Secondly, a weaker dollar makes imports, including oil costlier for US consumers. Higher input and borrowing costs could hurt demand and economic growth. Either way, the Fed and the US government needs to take a long, hard look at its problems. It needs to slash its bourgeoning budget deficit, and increase interest rates. If things continue the way they are currently, the US will have a long, rocky road to climb back into recovery.
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The picture is not all that bright though. As per this study, rural households that access PDS (public distribution system) have declined by 10%. However, the government figures reflect a PDS food grain off take of 90%. This points to the diversion of PDS food grains to open markets despite strict laws in place. Nonetheless, the outcome of the survey comes as a breather. Hit by a slew of corruption scams, the timing for an image makeover for India could not have been better.
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12 Responses to "The biggest possible barrier to India's growth"
Ganesh K
May 2, 2011The NREGA scheme assures 100 days employment to unskilled rural people by digging pits and then filling them. This is because if 100 days work is provided by state government 50% expenses are borne by central govt. But if state govt. cannot provide 100 days work then state govt has to bear 100% expense. State babus come up with schemes to dig pits and then to fill them. Babus also get cut in it so everybody happy. This has devastating effect on availability of labour for agriculture. The rural skills like carpenting,black smithy, masonary is fast vanishing because these skilled people go to unskilled work of NREGA as wages are ensured, that too without doing work. Soon we may have to import carpenters and masons from china or Bangladesh. Long live UPA. Phookat Baith ke Khaao.
Priyadarshan Mehta
May 1, 2011The biggest possible barrier to india's growth is the lack of will.Most leaders want to give great speeches but when it needs to be translated in action they fail.Most of the infrastructure and other projects are set up in areas that benefit the political leadership.It is now open that political leaders are more interested in making money for themselves than go in for public good.
Why do the benefits not travel to rural areas ? By giving doles they do not motivate the rural folk to work but live on doles. How many centres been set up to train tradesmen.There is a huge shortage of plumbers,carpenters,tradesmiths .There is a huge rush for govt. jobs because one may not work and get paid. We must instill in folks the desire to work honestly and get rewarded.
Nagesh Kini
Apr 30, 2011India's great story is mired by the widening disparities between the haves and have nots - the numbers sleeping on the pavements of mumbai, the debt ridden farmers in the hinterlands that have neither water nor power. The Tax authorities don't have a count of private jets, yacts, vintage cars, ferraris and luxury villas and apartments with roof top helipads and swimming pools, spas and gyms!
pointed out
Mera Bharat Mahaan, hum sub pareshaan
kyo ki 99% beimaan!
R.Jayaraman
Apr 30, 2011Dear Sir,
I refer to the news about a survey conducted by CMS, on corruption- Study 2010.That Corruption in India is prevalent in no small measure and is growing rapidly is very well known. Right from a clerk in a Taluk Office to members of Parliament and Legislatures and judiciary are corrupt. There are very few people that want to serve the community, enter politics. The saying "Politics is the last resort of a scoundrel" is more appropriate in India. But preventing corruption is not in the interest of the High and Mighty and Corporates. Corporate Crimes and corruption have taken Himalayan proportions.All businesses regularly pay speed money, large bribes to get licenses, Members of legislatures get cut on all contracts given by the Government. Corporates know how to generate Black Money to pay large bribes.Why there is such a demand to get a seat to contest elections. What questions are asked when an aspirant for an election ticket appears before Party Leaders for an interview for allotting a seat?They want to assess how much money the prospective candidate can spend. After winning elections the elected person's focus is on getting the money back several times over within the shortest possible time.
How many Parliamentarians and Legislative Assembly members have criminal backgrounds? Persons serving jail Terms are contesting elections. Persons arrested and on whom criminal cases are in progress continue to be members of legislatures.What kind of Democracy is this?
That a huge amount of money is stashed away in Tax Havens and that Indians form the core of such laundered wealth is common knowledge. Can a Government be lackadaisical in initiating steps to get the money back?
Vested interests prevent any worthwhile action being initiated.No attempts have been made to confiscate ill-gotten wealth. IAS officers in charge of Bhopal Relief amass wealth to the extent of Rs 300 crores. Nothing happens. Judges are accused of corruption in a large measure.They are transferred from one High court which has become noisy about the activities of the Judge to another High Court which is noiseless or less noisy about the corrupt practices of the Judge. They are happy and their tribe is increasing. Can some body tell me what is going on and what measures have been taken to combat wholesale corruption. The Years 2010-2011 have turned out to be 'annus horribilis' as regards Indian corruption. Merely publishing data to show corruption has halved by surveying a few households is a mockery of "Survey"
R S Chakravarti
Apr 30, 2011Social unrest is a mild term for Maoism! Hope the upwardly mobile yuppies wake up before it's too late.
AKGaur
Apr 30, 2011Dont know if you will post it./GOI is sleeping.Rural India is becoming poorer day by day.During UPA rule naxalites area of influence increased 300%.HomeMinister is utter failure.In the name of development tribals are removed from land by brutal force &land is given to bighouses.Where they will go?Every 32 km of Orissa coast is given to private port.What will happen to marinelife?Fisherman.Turtle?Total India's coastline is in danger.People living on sea are in danger of living their livlihood?Who is bothered?No political party ,no paid media.If we dont think about rural India then growth in urban area has got no meaning.What about urban poor??Think????/
AKGaur
Apr 30, 2011Dont know if you will post it./GOI is sleeping.Rural India is becoming poorer day by day.During UPA rule naxalites area of influence increased 300%.HomeMinister is utter failure.In the name of development tribals are removed from land by brutal force &land is given to bighouses.Where they will go?Every 32 km of Orissa coast is given to private port.What will happen to marinelife?Fisherman.Turtle?Total India's coastline is in danger.People living on sea are in danger of living their livlihood?Who is bothered?No political party ,no paid media.If we dont think about rural India then growth in urban area has got no meaning.What about urban poor??Think????/
S K Bhattacharjee
Apr 30, 2011You have written in one place of the article if dollar is weak then it makes imports, including oil costlier for US consumers. Higher input and borrowing costs could hurt demand and economic growth. Again, in another place it is written that weak dollar makes goods exported from the US cheaper. If this is so, then there will be Industrial Growth in the US. That means weak dollar may drive US in an advantageous position. Can you elaborate this a bit more?
krishnan
Apr 30, 2011Mahatma Gandhi National Rural Employment Guarantee Scheme is intended for offering jobs for rural mass during non farming season.This scheme created earnings and incresed the purchasing power.But the corrupt State officials and politicians of all parties have failed in implimentation and achive the development designed for the scheme.
I feel that the scheme has made increasing power of rural masses which is vital for growing economy.
manaswini
Jul 15, 2011no, i dont think so the benefits are not received by the lower section of the society, and the main reason for all these problems is the rising rate of corruption in india.