The end of February 2014 saw the release of another round of disappointing figures on India’s economy. In the final quarter of 2013, India’s economy grew by 4.7 percent, the fifth consecutive quarter of sub-5 percent growth. The 4.7percent growth rate is far below the 8 percent growth rate that is needed to combat the country’s chronic development challenges.
As India heads towards a landmark election, there is certainly a need to change the government as the Congress led UPA’s dire economic performance has casted a long shadow on people of the country.
The incumbent UPA government, a coalition of left-leaning parties, has long championed an “inclusive” growth model. But its failure to ensure that the benefits of growth have “trickled down” to the poor is well established. When adjusted for variations in the cost of living, 32.7 percent of India’s population live below the international extreme poverty line of $1.25 per day. India is home to a third of the world’s poor and on a host of other social and development indicators it continues to slip further and further behind other developing countries.
According to figures compiled by the World Bank and McKinsey, since the 1980s India has only lifted 35 million people out of extreme poverty. In China the figure is 678 million. India’s poor poverty-reduction rate is matched by rapid increases in income inequality. In January India’s Business Standard reported income inequality in urban areas across a third of India’s states reached its highest point in 2011-12 since 1973-74.
The widening gap in income levels in urban areas is the product of a number of factors: continued rural-to-urban migration, a contracting industrial sector and a growing under-skilled labor force. India is urbanizing rapidly, with the urban population set to increase from 27.8 percent in 2011 to 38 percent by 2025. The country’s shrinking manufacturing sector has not been able to absorb this migrant labor force, exacerbating the problems of urban unemployment, slum expansion and widening income inequality. These challenges have had a long gestation, and persistent policy neglect is to blame. It is clear that the Congress led UPA government at the centre continues to be evasive in addressing the legitimate needs of a fast growing urban India.
Manufacturing has the potential to be an engine of growth and development. But owing to bad policies of the Congress led UPA,Indian industry has become the country’s economic “Achilles’ heel.”The country’s manufacturing sector continues to be hobbled by poor electrification, a shortage of skilled workers and inflexible labour laws .
Improving public services, reforming labor regulations and boosting infrastructure are three things which are central to India’s effort to tackle poverty, boost employment and revive industry.
Until then India is witnessing the curious phenomenon of “reverse migration”: due to the lack of manufacturing jobs, 12 million people are set to return to rural areas from cities by 2019. These estimates, produced by Crisil, an Indian research institute, also show that the rate of job creation across both industry and agriculture is declining.
India is famously enjoying a demographic divided: it has a growing population with millions more entering the labor force each year than are leaving it. With a median age of 26 and with almost two-thirds of the population under 35, India is well placed to compete with the aging populations of its Asian economic rivals China and Japan. But India’s vast stock of labour is being squandered by a shortage of jobs, a stumbling manufacturing sector and desperate skill deficits – challenges with serious implications for urban India.
The present government has failed to meet the challenges mentioned above during the last 10 years. It is time to usher in a new era of new economic reforms under the leadership of a visionary leader like Sh. NarendraModi. So let us vote for better economic policies this time, let us vote for BJP, let us endorse Sh. NarendraModi’s candidature for Prime Ministership.