Despite the tide of global recession, India registered a growth rate of 6.7% during the previous fiscal and is expecting a growth rate of over 7% during the current fiscal. Indian economy is the second fastest growing economy in the world. But does that really mean India is shining???
The per capita income of India is estimated at `40,141 during 2008-2009. This does not mean that every Indian earns at least this much amount every year. There are quite a few number of people who earns well below this amount. According to the surveys conducted by various organizations, there are people who earn less than `100 a day. The standard of living of poor people is not increasing accordingly to the increase in GDP. The increase in GDP is contributed to the fact that wealth is being accumulated on to the hands of the rich. This situation should change in order to achieve overall development. The Government of India along with The Reserve Bank of India can play a very important role to achieve this. Instead of going after the growth rate, the government should try to bridge the gap between the rich and the poor. Then automatically the other things will come in our favour.
Indian financial system is very robust, functioning under the strict guidelines of the RBI and the government. This is one of the main reason why Indian banks have not collapsed during the economic turmoil which affected major economies of the world. The government should also be able to leverage this to the development of its people, especially the poor.
The food price inflation in India is remaining as high as over 17% for the past few weeks. Inflation based on Wholesale Price Index in January is 8.56%. How can a fixed income earning Indian citizen cope up with this high inflation? Almost impossible. There is no wonder why people turn into naxals. A very low or negative inflation is also not good for a healthy economy. The government should try to contain the inflation between 3 to 5 percent. This is not an easy task. To achieve this, corruption and hoarding should be completely erased from the Indian soil. According to the study conducted by Transparency International, India is placed at 84th position w.r.t Corruption Perceptions Index (CPI). India has a CPI value of 3.4 out of 10 in the year 2009, where a higher value denotes less corruption. New Zealand is the country with least corruption (CPI 9.4). But it is encouraging that the CPI for India is consistently increasing according to the surveys. Hoarding is also a major factor for the rising food price inflation. In order to stop hoarding, we should stop corruption first. Those officials who support hoarding should be punished.
The Union Budget presented by the Finance Minister in the Parliament recently has a number of good propositions which are overshadowed by the move to increase excise and customs duty for petroleum products. This will make the life of ordinary people more miserable who are already suffering due to high inflation. The firm stand by the PM and FM on this issue is very disappointing for the ‘aam aadmi’. Though they calculate that this move will not increase the inflation greatly, a slight increase may affect the ordinary people. The Ministers and political leaders will not feel much difference because they are living at the expense of the people.
India is one of the wealthiest countries of the world in terms of human resource. But are we able to leverage this advantage to its fullest??? The answer would be a big no. The government should take initiative to make India investor friendly in order to exploit this advantage. The Central Government along with various State Governments can do a lot more to make India really shining.
