India is widely projected abroad as a shining success story of economic reforms, an important “emerging market” for northern goods and services, and an attractive destination for investment, all this in view of the high annual GDP growth rate, which has been averaging 6 to 7 percent, second only to China. This portrayal of a dynamic economy is indeed partially true, and it carries benefits for a small well-to-do minority, but it is entirely misleading as regards the welfare implications for the majority of the population. A high growth rate by itself conveys no information at all either about the composition of this growth or its income distribution effects.

Agriculture and industry, the material productive sectors supporting together over four-fifths of the population, have gone into stagnation or decline as regards contribution to GDP and to employment. There has been a severe depression in agriculture in particular for over a decade, marked by falling per-head real incomes. Unemployment rates in both rural and urban India have been rising, and average food grains absorption within the country has declined to a historic low comparable to the colonial period, with the brunt of the increased hunger being borne by rural

< Prev   CONTENTS   Source   Next >