Beruflich Dokumente
Kultur Dokumente
Flawed Debate
Swaminathan S Anklesaria Aiyar,
presentation at IMF, April 28, 2011.
Abstract
Critics say India's record GDP growth of 8% in recent years has
benefited a tiny elite, bypassing poor regions and groups. In fact 8%
growth has been made possible only by phenomenal growth in
poor states accounting for half India's population. So, it is not the
case that, having achieved 8% growth, India must ensure that
something trickles down to poor regions. Rather, fast growth has
trickled up from poor states to the national level.
They are now enjoying a demographic dividend that bodes well for
the future.
Literacy has improved fastest in the poor states.
Dalits in north India have registered big leaps in dignity and
incomes in the fast-growth era.
One result is that three-quarters of incumbent governments now get
re-elected, whereas three-quarters use to lose.
Despite these gains, enormous problems remain of poverty,
inequality, discrimination and dismal public service delivery.
Bihar
4.5
12.4
Chhattisgarh
6.1
9.7
Jharkhand
1.9
8.5
Madhya Pradesh
1.9
6.6
Orissa
4.8
10.2
Uttar Pradesh
3.3
6.7
ALL INDIA
5.6
8.5
Poor states
Bihar
Assam
0.17
0.17
Jharkhand
0.2
Rajasthan
0.2
UP
0.23
MP
0.24
Orissa
Chhattisgarh
0.25
0.24
INDIA
Advanced states
Maharashtra
Gujarat
0.27
0.25
Punjab
0.26
Haryana
Kerala
Tamil Nadu
Karnataka
0.31
0.29
0.26
0.23
0.25
Latest estimate poverty HCR at 32% in 2009-10, down from 37.2% in 2004-05 and
45.3% in 1993-94.
Critics say its one percentage point per year, no acceleration despite record growth
last five years. Wrong. Poverty reduction/year in1993-2004 was 0.73 percentage
points/year, has risen to 1.02 percentage points per year in the high growth period
2005-10. Note: 2009-10 was a drought year, would depress HCR below trend.
Problem: ratio of consumption measured by poverty surveys to consumption
measured by national accounts is falling crazily: from 87% in 1972-73 to 48.8% in
2004-5 and just 43% in latest 2009-10 survey.
Leftists claim missing consumption is entirely of rich, and that consumption of poor is
captured by NSS surveys. Very unlikely.
NSS data suggests no buoyancy in rural demand at all. But marketers of everything
from shampoo to motor cycles to cellphones talk of rural boom. NCAER surveys
suggest 23% of supposed poor own pressure cookers, over10% own two-wheelers
Mini-sample survey 2007-08 showed HCR down to 27%. Bhalla sneers that NSS data
claim that real consumption fell 7 % in next two years, like Great Depression!
Devesh Kapur: poor understate their living standards to ensure not cut out of govt
subsidies/freebies. Trend probably worsened after 1999 when subsidies more sharply
targeted at poor, more incentive to understate.
1993-94
2004-05
Orissa
35.1
14.2
5.9
Bihar
34
6.8
3.2
MP
14.1
2.6
2.1
UP
10.7
3.3
1.9
West Bengal
36.5
14.3
11.7
Assam
14.9
9.9
5.5
Kerala
17.5
9.4
2.5
Rajasthan
4.2
1.5
INDIA
17.3
5.2
2.5
Nutritional puzzles
Per capita calorie consumption falling for all deciles although far
below nutritional norm of 2,200 Kcal/day
Consumption switch from cereals to superior foods esp fats: not sign
of distress. Hunger is also almost gone.
Why then are nutrition indicators among the worst in the world?
Many puzzles. Richest 20% of pop has 20% underweight kids, 25%
stunted,13% wasting. Anaemia, diabetes very high, but affects
richest too.
FHS-III suggested underweight kids barely changed from 47% to
46% between 1998-99 and 2005-06. But stunting declined from 51%
to 45%. Wasting worsened from 20 to 23%.Very puzzling: why
should wasting worsen if heights improving? NNMB survey has
almost opposite resultfall in underweight kids and wasting, rise in
stunting! Indicators look terrible, yet many puzzles defy analysis.
(Deaton and Dreze 2008)
UP
MP
Orissa
Jharkand
Chatisgarh INDIA
Overall
literacy
16.82
11.45
6.9
10.37
16.07
6.3
9.7
Female
literacy
20.2
17.1
9.7
13.9
15.3
8.6
11.8
UP
3.55
MP
5.76
Orissa
3.96
Jharkand
2.3
2.1
Chatisgarh INDIA
-4.3
3.9
New leaders take development seriously. In UP, Bihar CMs aim first for dignity
for lower castes, development focus come later. Laloo focused on dignity of
OBCs and Muslims, said development benefits upper castes. Mulayam supported
cheating in exams to benefit OBCs! Mayawatis dalit statue craze aims for
dignity. Once dignity established, go for development. Nitish and Maya best
examples.
Convergence. (1) First policy changes open up opportunities. Advanced states
grab these first, backward states follow with a lag. (2)Development becomes
election winner, changes political economy. (3) revenue boom helps: so do
Central schemes-Bharat Nirman, Sarva Shiksha Abhiyan, National Rural Health
Mission. (4) Fast growth creates labour shortage, raises real wages .
Demographic dividend underpins inclusive growth in poor states. Fall in
absolute number of kids aged 0-6 year means less shortage of teachers, smaller
class size.
Terrible public service delivery. Need major structural reform, not more
spending that is largely wasted.
Huge waste of fiscal resources on handouts and leakages; big corruption;
callous, unsackable civil servants; moribund police-judicial system.
Heritage Foundation index of economic freedom: India ranks only129th of
183 countries, categorized mostly unfree. Big unfinished reform agenda.
Doing Business series: India is 134th/183 countries. Worst in ease of
starting business (165th), construction permits (177th), enforcing contracts
(182nd).
India far below potential in both growth and social justice.
But record growth has benefited poor people, poor states, and dalits.
Fast growth has trickled up from poor states to national level. This is an
inclusive model, no contradiction between fast growth and social justice.
Convergence and demographic dividend will continue boosting poor states,
and India too.