Slow Rate of Growth and its Security Implications to India

01 Sep, 2001    ·   562

Saurabh analyses various negative implications to India on the security and governance fronts due to its dawdling economic growth
saurabh
India was economically weak when it became independent in 1947. Its foremost challenge was to eliminate poverty, deprivation and want by developing its stagnant economy. A growth-based strategy was adopted to achieve this end. Despite a high rate of growth in the 1990s and the dynamism of the economy during the last 4-5 years, the overall performance of the Indian economy has been unsatisfactory. Its GNP has remained small as compared to most developed countries and a number of developing countries.

 

 

The rate of growth fell short of the targeted growth rate in the Second, Third and Fourth Five Year Plans. Since then the actual performance has been only marginally better than the targets set. But, again, in 1999-2000 the rate of growth has decelerated for the second successive year. The Economic Survey (2000-01) reveals that the growth rate in the service sector also is expected to decline, especially in the community, social and personal service areas. Despite a normal monsoon, agricultural production in 2000-01 is expected to decline to 199 million tonnes from 208.9 million tonnes in 1999-2000. 

 

 

The overall industrial growth path in the 1990s was marked by cyclical fluctuations. In 1998-99, it dropped to 4.1 per cent. Overall industrial growth was only 5.7 per cent in April-December 2000 compared to 6.4 per cent in 1999. The performance in electricity generation was dismal. It recorded only 4.8 per cent growth during April-December 2000 compared to 7.7 per cent in April-December 1999.

 

 

Clearly, a slow growth rate will not generate enough income to satisfy the basic needs of the expanding population. Again, hardly ten per cent of the total number of those who need work under the ‘food-for-work’ programme found work. The ineffective implementation of the government programmes, and slow rate of growth, along with maldistribution of income, has been largely responsible for the continuation and aggravation of the massive problem of poverty and malnutrition deaths in the country. The state has failed to solve this chronic problem of malnutrition, and also failed to secure the constitutional obligation to protect the right to life embedded in Article 21 of the Constitution.

 

 

The slow rate of growth has been attributed to inadequate investment in the education sector. India failed to give proper emphasis to universal, high quality primary and higher education. The poor quality of education has failed to create skilled workers, who could have played a major role to advance the country; the absence of a broad base of workers with basic education means that the benefits of industrialisation cannot be widely shared.

 

 

India has also failed to increase its saving rate. Gross domestic savings as a proportion of GDP declined from 23.5 per cent in 1997-98 to 22.0 per cent in 1998-99. Also, there was a steep fall in the savings of the public sector in 1999-2000 as compared to 1998-99. Gross domestic investment as a percentage of GDP also showed a similar trend. It declined from 25.0 percent in 1997-98 to 23.0 percent in 1998-99. India 's negative growth in public savings is a major constraint on domestic resource mobilisation.

 

 

Inadequate growth has resulted in destitution and deprivation and contributed to the continuing problem of large-scale unemployment. Unemployment and low productivity employment has led to poverty, income inequality and denial of even minimum development opportunities to large groups of the Indian population, which has become India ’s most enduring socio-economic problem. It is not a co-incidence that the worldwide increase in violence is occurring together with an increase in the intractability of the unemployment problem. The problem of unemployment has contributed a lot of violence, be it the Naxalite movement, the militancy in Kashmir or the insurgency in North-East India . This has weakened the Indian state and made its governance difficult. This cannot but have adverse implications on India 's security.

 

 

The relatively slow rate of growth and saving has kept India economically weak, and hence a minor player in the world power politics. India 's clout among the nations of the world has sharply declined. Many countries that were behind India at the time of India 's independence, in terms of the size of the GNP and per capita incomes, have since forged ahead of it. This has been an important factor undermining India ’s position and prestige in the world. As a result, India has frequently failed to safeguard its national interests in strategic bargaining on economic and security issues and has come under severe pressure in these negotiations. This has serious implications for India ’s independence of judgement and action in formulating a people-oriented economic policy for the country.  

 

 

 

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