India’s Growth Story

Why things may seem great at the moment, but some things aren’t going right.

The country we live in is passing through a crucial transition phase. Change is sweeping across all sections of society, and none of us is immune to it. We have all encountered change in our daily lives. This change manifests itself in various avatars, but here let us dwell on the demographic profile of our nation vis-a-vis the rest of the world. Studies have shown that India as a nation is growing younger, as in the percentage of the population in the 20-45 years of age bracket, is increasing rapidly, when compared to the other nations. European nations in fact display an opposite trend. The percentage of older population in these nations, 60+years, is increasing much more when compared to the younger population. When added to the problem of already declining fertility in many European nations, it clearly shows that India is in a very advantageous position indeed where human resource is considered, since the 20-45 years age bracket comprises the most productive years of a person’s life. So India is actually growing younger whereas other nations are ageing.

The significance of this development is that the predominant youth population is at the perfect stage to deliver to the nation, especially when the country is in a mode of rapid growth. Manpower is the most valuable resource and the most critical component of development, and to sustain the rapid rate of growth that we have witnessed in the past 2 years, India has to fully leverage its human resource potential. This directly translates into huge opportunities for today’s youth. Newer career avenues, non-existent a few years ago, have opened up. Even though our population is burgeoning rapidly, yet opportunities have also multiplied manifold over the past decade. A rapidly developing economy requires a diversified workforce, and everyone’s skills are in demand today, be it a lawyer, doctor, engineer, chef or fashion designer. So it may seem that the development pie is sufficiently large for enough for everyone to bite into. In short, there is room for everyone here.

But examples around the world have shown that development is hardly ever inclusive. According to the “trickle-down effect” theory, development of the upper class percolates down to the middle class, which in turn percolates to the lower income groups, though the fruits of development progressively decrease. This phenomenon has happened wherever development has taken place around the world, including India.

But the situation is somewhat different today than what it was a decade or two back. Earlier people used to take poverty in their stride, and believed that God would someday definitely pay them for their hard work. But as time passes by and they see the rich getting richer due to the effort that they put in, a kind of frustration sets in. So people are no longer willing to resign to their fate and accept poverty as their future, they too want a bite of the development pie. The difference between the rich and poor today is far greater than what it was ever before. A poor man may have worked hard all his life as a taxi-driver, and may still be no better off than when he started off. However, you guarantee a job for his sons, and he would willingly forget his sorrows and feel proud that his next generation wouldn’t have to face the hardships that he had to. But if his children too have to live the same foot-to-mouth existence, the very future he was trying to prevent for his children, then it’s obvious that the person asks himself what has been the result of working all these years. It is then that people lose their faith on the system, and try to bend it, curve it, or may be bend themselves to work in conjunction with it. Or else break it, and turn to crime, the final refuge. Frustration leads to disillusionment and anger, which fills the minds of these people, and blocks the rational thought process. It is this anger and frustration amongst the masses that few political parties very cleverly tap, hence you see the increased frequency of acts of public outrage these days, which manifests itself in the form of bandhs, strikes, and violent protests.

I’m not here to paint a dystopian future for us, but the facts are there for all to see. Mismanagement of something as valuable as human capital can create havoc, and crumble the already fragile system. A 2005 study by McKinsey found only 10-15 per cent of India’s non-technical graduates and only 25 per cent of its engineering graduates are actually employable. And we haven’t yet thought of the vast uneducated population. Involving all these people in India’s growth story is surely an onerous challenge to say the least, yet without inclusive growth, a large section of our population will be forever left out of India’s growth story, and the resentment amongst the masses will surely lead to sporadic violent outbursts. Inclusive growth is the only solution, however saying so is the easiest part, and actually implementing it the most challenging and difficult. Its up to the government to take more proactive action to combat this problem, instead of giving suggestions like decreasing CEO remuneration so as to bridge the divide, which is not a solution, just a stop-gap effort. Critics may say that there will always be rich people and there will always be a much higher number of poorer people, nobody can prevent that. Maybe that is the cruel funda of society.

Non-inclusive development, that is of certain sections of society only, is like a thin layer of ice on a lake, with water beneath. You see the layer of ice, and think the lake has solidified. You take your skates out to skate on the ice, and only when you reach the middle of the lake do you realize that the ice is too thin to support your weight. The ice cracks, and you fall. The symbolism is left for you to envisage…

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Tags: inclusive development, india growth story, trickle-down effect

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