No Impact Of Economic Slowdown On The Rural Economy | bench3

No Impact Of Economic Slowdown On The Rural Economy | bench3

By   22:31   No comments:

Continued From Importance Of Rural Economy In India - The New Mantra

 

Rural Orientation Indian economy is peculiar to the extent that it has a lot more rural orientation than most economies of the world. Majority of the countries in the world are dependent on their industrial centres and rapidly growing cities for maintaining their growth rate. In India, though industries and the services sectors are centred around the industrial and urban areas, yet over 60 per cent of the work force is directly or indirectly dependent on the primary sector.

This sector contributes about one fourth of the total GDP and offers tremendous potential for growth in the near future. Being a low income segment, this also does not get influenced easily by extraordinary economic situations. As per the views of the Rural Marketing Association of India, there has been no impact of economic slowdown on the rural economy of India. A nation-wide study carried out in the rural markets of the country found out that the rural markets in the country actually offer an opportunity to the marketers to come out of current economic crisis.

Main reasons for such immunity are stated to be higher percentage of total expenditure on food items and the fact that majority of the population is involved in self-employment occupations, having no fear of loss of jobs. The telecom sector has witnessed a rapid growth in the villages and small towns. The total telecom subscriber base for India grew from 70.83 million in the first quarter of 2008 to 90.98 million in the second quarter. Out of this growth 71 per cent rise in this sector came from the rural India, while the urban areas accounted for the remaining 29 per cent growth. 

The study also brings out that more than 72 million Kisan Credit Cards are in use in the rural areas of the country, which number almost matches the number of Credit Cards under use in the urban areas. During 2008, larger part of growth of Fast Moving Consumer Goods (FMCG) came from rural and sub-urban markets. Majority of the people in the rural areas do not invest in stock markets and park their savings in low risk portfolios like post office/bank savings or fixed deposits. The government of India was quick to realize this and immediately after the recession began to show its impact began to direct its economic policies towards the rural sector. 

Fortunately for the country, at the critical juncture when the great recession knocked at the doors of Indian economy, several government sponsored programmes involving huge public expenditure in the rural areas were already being implemented. 

Related Topic:
Interim Budget 2009-10 Gives Importance To Rural Economy
Importance Of Rural Economy In India - The New Mantra

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The Future Belongs To India, Not China

The Future Belongs To India, Not China

By   02:02   2 comments:

what is the difference between China growing at a rate of 10% and India at 8%? 

The difference was, indeed, very significant. If we were to grow at 10% we could save twenty years. This is almost a generation. We could lift a whole generation into the middle class twenty years sooner. 

"We have waited 3,000 years for this moment. Why don't we wait another twenty and do it the Indian way?"

The cost of democracy is the price the poor pay in the delay of their entry into the middle class. The 'Indian way'  includes taking a holiday on half a dozen New Year's Days! It is easy to get mesmerized by China's amazing progress and feel frustrated by India's chaotic democracy, but Indians will not trade off democracy for two per cent higher growth. 

In referring to the 'Indian way', a nation must be true to itself. Democracy comes easily to us because India has historically 'accumulated' its diverse groups who retain their distinctiveness while identifying themselves as Indian. China has 'assimilated' its people into a common, homogeneous Confucian society. China is a melting pot in which differences disappear while India is a salad bowl in which the constituents retain their identity. Hence, China has always been governed by a hierarchical, centralized state - a tradition that has carried into the present era of reform communism. China resembles a business corporation today. Each mayor and party secretary has objectives relating to investment, output and growth, which are aligned to national goals. Those who exceed their goals rise quickly. The main problem in running a country as a business is that many people get left out.

India, on the other hand, can only manage itself by accommodating vocal and varied interest groups in its salad bowl. This leads to a million negotiations daily and we call this system 'democracy'. It slows us down - we take five years to build a highway versus one in China. Those who are disgruntled go to court. But our politicians are forced to worry about abuses of human rights, whereas my search on Google on 'human rights abuses in China' yielded 47.8 million entries in 13 seconds! Democracies have a safety valve - it allows the disgruntled to let off steam before slowly co-opting them.

Both India and China have accepted the capitalist road to prosperity. But capitalism is more comfortable in a democracy, which fosters entrepreneurs naturally. A state enterprise can never be as innovative or nimble and this is why the Chinese envy some of our private companies. Democracy respects property rights. As both nations urbanize, peasants in India are able to sell or borrow against their land, but the Chinese peasants are at the mercy of local party bosses. Because India has the rule of law, entrepreneurs can enforce contracts. If someone takes away your property in China, you have no recourse. Hence, it is the party bosses who are accumulating wealth in China. The rule of law slows us down but it also protects us (and our environment, as the NGOs have discovered).

We take freedom for granted in India but it was not always so. When General Reginald Dyer opened fire in 1919 in Jallianwala Bagh, killing 379 people, Indians realised they could only have dignity when they were free from British rule. The massacre at Tiananmen Square in 1989, where 300 students were killed, was China's Jallianwala Bagh. China today may have become richer than India but the poorest Chinese yearns for the same freedom.

Because the Indian state is inefficient, millions of entrepreneurs have stepped into the vacuum. When government schools fail, people start private schools in the slums, and the result is millions of 'slumdog millionaires'. You cannot do this in China. Our free society forces us to solve our own problems, making us self-reliant. Hence, the Indian way is likely to be more enduring because the people have scripted India's success while China's state has crafted its success. This worries China's leaders who ask, if India can become the world's second fastest economy despite the state, what will happen when the Indian state begins to perform? India's path may be slower but it is surer, and the Indian way of life is also more likely to survive. This is why when I am reborn I would prefer it to be in India, again.

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