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India to grow as caring, inclusive country: FM

Written by: Staff

New Delhi, Oct 24: Narrating the growth story of India in the context of her socio-economic agenda of development with democracy, Finance Minister P Chidambaram today promised of building a caring, inclusive and prosperous country in a democratic polity. ''We have before us an unfinsihed agenda of sustainable economic development in a democratic polity.

Work is in progress, and we will succeed in building a caring, inclusive and prosperous India,'' he told a distinguished gathering of scholars, researchers and representatives at Norwegian Institute of International Affairs and the Nobel Institute in Oslo today.

Stating that without peace and international understanding there can be neither development nor democracy, he said in the modern age, development and democracy have often been at odds with each other. Giving an illustration, Mr Chidambaram said for well over a hundred years, the United States developed into a prosperous country even while employed slave labour and denied political and economic rights to women. But gratifying to note that more and more countries are inclined to pursue both goals - development and democracy and India is among these countries.

He said unlike many independent states, India plodded along on the path of democracy and kept faith with the socialist model which gave her a growth rate of 3.5 per cent a year but that was not enough to make a dent on poverty. After 30 years, at the end of 1977-78, 51 per cent of the Indian people were characterised as extremely poor.

Mr Chidambaram said the first winds of change began to blow in the 1980s and the decision came in 1991. Faced with the threat of bankruptcy, India made a paradigm shift, and the India story began in June 1991, he added.

Narrating India's growth story, Mr Chidambaram said GDP at market prices has increased from 20 billion dollar in 1950-51 to USD 912 billion in 2006-07 and is expected to cross a trillion dollars in the current year. In terms of purchasing power parity, India's GDP at USD 4 trillion in 2006-07 accounted for 6.3 per cent of global GDP. Average annual economic growth, which had been constant and tardy at 3.5 per cent during the first thirty years of Independence, increased to 5.7 per cent during the 1990s and, since 2003-04, the average rate has increased further to 8.6 per cent.

Stating that 2006-07 was a splendid year with the GDP growing at 9.4 per cent, the Finance Minister said this growth has not been jobless growth, adding that between 1999-2000 to 2004-05, India added to its workforce about 12 million people each year. During this period, the rate of growth of employment was 2.9 per cent per year. India, after China, is the fastest growing economy of the world, and together with Brazil, Russia and China is the locomotive driving world growth.

Describing India growth story a development story, he said it is founded on its democratic roots. He said India went through participative and consultative processes and, therefore, the most difficult economic reforms have proved to be credible, durable and most importantly irreversible.

He said though the proportion of people living below the poverty line in India has declined from 51.3 per cent in 1977-78 to about 22 per cent in 2004-05, but in absolute numbers they still are around 250 million. ''More than one third of our 1.1 billion people live on less than one dollar a day. A large proportion lacks access to public goods such as clean drinking water, sanitation, basic health care, electricity and roads.''

Having adopted the Millennium Development Goals, Mr Chidambaram said its mid-term assessment said India has made remarkable achievements on several fronts. The country has achieved an enrollment ratio of 95 per cent in primary education and 73 per cent school children are now reaching grade five. ''We have managed to provide drinking water to 83 per cent of our rural population and sanitation coverage has gone up in the last decade to 22 per cent from a dismal rate of 3 per cent.'' But he reminded that If the developed countries of the world are serious in their intention to achieve the Millennium Development Goals, they must realise that the goals will not be achieved until they are achieved in India and China.

India, he said, has adopted many strategies to reduce the disparities and achieve faster and more inclusive growth. In 2007-08, the Union government allocated Rs 143 billion for healthcare and Rs 286 billion for education. At the end of 2006-07, housing loans outstandings stood at Rs 2,307 billion and the government planned to build 6 million houses in four years. Since the programme was launched in 2005-06, we have constructed 3.1 million houses for the poor.

He said India is not only a young nation in age but also because one-third of its population is below 15 years of age. India is the only large country in the world where the size of the working age population will grow and will exceed the number of dependent children and old persons until 2025, and perhaps even beyond till 2045. The size of the work force will grow, incomes will grow, savings will grow and investments will also grow. The challenge is to seize the opportunity and turn India into an economic powerhouse, he added.


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