Finance Minister Pranab Mukherjee has spelt out three challenges: the first is to quickly revert to the high GDP growth path of 9 per cent and then find the means to cross the double digit barrier; the second is to harness economic growth to consolidate the recent gains in making development more inclusive; and the third is to erase the weaknesses in government systems, structures and institutions at different levels of governance.
Politicians and economists have admitted the GDP growth benefit has not percolated to the large section of the human race. According to the UNDP Asia Pacific Human Development Report, the global trade has increased inequalities not only between countries but within national borders, among different areas, sectors and households.
The GDP growth in India has added one lakh dollar millionaires. According to the 2010 Forbes International report, India is one of the 11 countries which have at least doubled the number of billionaires since 2009. The irony is that half of India’s population continues to live on less than $1.25 a day. Approximately 2.4 million children die every year due to measles, diphtheria, diarrhea, malnutrition and water borne infections.
Bridging the gap
The Union budget has allocated huge social sector fund of Rs 1,37,674 crore which amounts to 37 per cent of the total plan outlay of 2010-11. The fiscal deficit has let government to borrow an excess of Rs 3,00,000 crore to meet the social sector commitment. But, distributing the growth benefit is not all that easy.
In order to percolate the growth benefits, the RBI had advised all banks to achieve 100 per cent financial inclusion by 2012. No frill accounts have been opened to route all kinds of social sector benefit through the banks.
Andhra Pradesh and Karnataka governments have recently agreed to route the social sector benefit through the banks. India has a huge mass of illiterate people who do not know where to put their thumb impression. The effectiveness of financial inclusion solely depends on the integrity of bankers.
Routing the social sector benefits also depends on the quality of NGOs, as many of them have developed the skill of showing their performance on paper only when the ground level story is different.
In fact, more than the welfare schemes people want their means of livelihood to be safeguarded. For example, India imports nearly 800 tonnes of gold per year worth $10 billion, which is one third of the total gold output of the world. After value addition the gold items fetches more than $15 billion. Here the government has to ensure the artisans who add value to gold with their skill and imagination receive their due share.
One litre of milk costs Rs 28 in Delhi. Out of which the intermediaries share is Rs 10. Here the milk producers and the consumers suffer in the entire supply chain. The total national out put of milk is 100 million tonnes out of which dairy cooperatives procure hardly nine million tonnes. More procurement of milk by the dairy union in a healthy supply chain could encourage dairy farmers.
Millions of Indian grain farmers, vegetable and fruit growers need a transparent supply chain, which could improve their living condition.
The National Bureau of Plant Genetic Resources (NBPGR) found a number of alien pests and diseases which have entered the country posing serious threat to food security. The NBPGR report says the incidents of pests were not known to India a decade back. What the farmers need is not relief package but bio security, which will protect their livelihood.
London-based micro finance expert Malcolm Harper suggested India can effectively use its vast mobile telephone network to increase penetration of micro finance in rural India. Indian economists and bankers immediately plunged into action without examining the fact that in the absence of livelihood safeguard all kinds of tools for financial inclusion have little effect.
Large number of frauds occur in e-transaction if proper track is not kept. Educated urban users keep track of their transaction which is not possible for the huge mass of illiterate users.
In fact, the finance minister faces multiple challenges. The biggest ever challenge is the absence of quality human resources with original thinking. There is urgent need to groom a few generations of morally and physically strong people with human sensitivity who can dare to undo the wrong. India is blessed with two renowned Yoga Gurus: Swami Ramdev and Sri Ravishankar whose HR techniques have helped millions of people across the world in increasing their productivity. India can very well internalise their HR inputs for inclusive growth.