Economic Development: Are We Losing The Race

Growth and Development, two terms often used synonymously aren't synonymous when referred to for a developing country. While economic growth measures expansion of the economy in terms of GDP economic development measures the extent to which the benefits of growth are infused into the population. Economic Development is a much broader term talking of structural changes in the economy. India started its economic development process way back in 1950 with the initiation of 1st five year plan. Even after six decades of economic planning and two decades of economic reforms that started in 1991, Indian economy's development remains sluggish. 

Indian GDP grew at an average rate of 7-8% for most parts of the past decade and the country today is third largest economy in terms of purchasing power parity. This might symbolize our economy's power and growth but what it certainly not symbolizes is development. This is because even after all the much talked growth 70% of India lives in villages 90% of which don't have all weather road; even after being one of the largest producers of food grains in the world India ranks 67th in global hunger index of 84 countries; even after agriculture's contribution to GDP fell to 17%, 50% of the population depends on it for livelihood. Thus, the basic structure and basic problems of economy haven't changed. 

Now, suddenly when corruption and inflation working together have derailed India's growth train it is the time to focus on structural changes. It is the lack of structural change that makes economic growth unsustainable. Hence, to put India on a path of self propellant growth their is a need to bring about structural reforms. Most important one is to create a sound industrial base with good investment in R&D. Apart from this, we have world's largest young population and a huge demographic dividend to reap but, this can't be done until we skill our labor force and bring more and more people into the labor force to reduce the dependency ratio. We also need to revitalize village economies and create alternative employment opportunities in rural India to do  away with disguised unemployment, something very peculiar to Indian agriculture. There is also a need to restructure the poverty alleviation programs to make them more relevant and sustainable. Needless to say there are a plethora of socio-economic reforms that need to be carried out all of which can never find place in one single article. 

Thus, for a sustainable Indian growth story what is most required is political will which at present seems to be lacking and that is why it seems like we are losing the race of development. But, Indian civilization is something way beyond Phoenix, while it rose from its ashes ours never turns to ashes. So, we will win the race of development. It is only a matter of time before we actually do that.