Poverty & Development : India in the 21st century

| by Dr. Ruwantissa Abeyratne

( November 03, Montreal, Sri Lanka Guardian) India, Sri Lanka’s closest neighbour, has a population of 1.129 billion which is spread at 924 persons per square mile. This dense population reaches across the country with 28.5% living in urban areas and 71.5% living in rural areas. The anticipated growth of population in India over the decades ahead is 600 million. The Ditchley Foundation records that, according to a recent study 26% of the present population is below the official poverty line.
Relations between India and Sri Lanka have been friendly, both countries having established diplomatic relations when Sri Lanka gained its independence in 1948. Both nations proceeded to establish extensive cultural, commercial, strategic and defense ties to establish a common sphere of influence in the region, adopting a non aligned policy to respond to the growing influence in the region by the United States and Russia.
The nation is a multiparty federal republic with two legislative houses: the Council of State and the House of the People. The Chief of State is the President while the Head of Government is the Prime Minister.
India is the thirteenth largest economy in the world and fourth in terms of purchasing power. However, it still produces less than 1% of the world’s exports. The annual growth rate of the country is an impressive 8% and there is a robust and growing large middle and upper economic class. Encyclopaedia Britannica (2008) records major import sources of India as China: 6.3%, United States: 5.9% Switzerland: 5.4%, U.A.E: 4.3%, Belgium: 4.3%, Australia: 3.3%, United Kingdom: 3.2%, South Korea: 3.0% and Japan: 2.8. Major export destinations are United States: 16.7%, U.A.E. 9.0%, China: 5.8%, Singapore: 4.8%, Hong Kong: 4.6%, United Kingdom: 4.5%, Germany 3.3%, Belgium: 3.1%, Italy: 2.1%; and Japan: 2.5%.
The economic survey for India in 2009 shows much promise. As a result of its establishing a market based economy, the eeconomy is projected to grow around 7 percent in 2009/10. This of course is largely dependent on how the US economy recovers over next few months. If the US economy bottoms out around December, as many analysts are expecting, India can easily look at 7% upwards growth. The Survey reflects that the economy will get back to its growth path of around 9% in the medium term. The government has shown its eagerness for fiscal consolidation. The fiscal deficit target is suggested to be set at 3 percent of GDP at the earliest. Inflation is suggested to be a non-issue moving forward. The Survey has also suggested allowing the public to hold greater equity in public sector banks and aligning of voting rights in banks with equity holdings. It also recommends a calibrated monetary policy approach for early return to high growth path and that quality foreign direct investment should be allowed to seek regulatory reforms in higher education.
One of India’s greatest strengths is its information base and its potential in telecommunications and information technology (IT) which has opened out its society and exposed it to the global market. However, one of the greatest challenges facing the country is the compelling need for infrastructure development, particularly in road transport. This mode of transport serves industry, agriculture and trade and is a determinant of employment growth. Another challenge facing the country is the need to build institutions which are effective in delivering policy and charting a path and framework for future economic and political development without too much bureaucratic control. One commentator has opined that Government should be an enabler rather than a provider or an employer and that the knowledge and information base of India should be allowed to flourish in the global market and that the country should approach its economic strategy with the overall goal of precluding the continuance of two Indias, with the gap increasing between the growing wealth of the upper middle class/rich and the considerably large number of poor who are mainly dependent on the Government.
In terms of political stability of the country and the dangers of fragmentation, given the country’s size, there is some confidence among political analysts that the central administration would prevail. India has a sound record of conflict resolution and a natural predilection towards diffusing civil unrest.
In foreign relations it is expected that India would maintain its consistent and regular pragmatism and pacifism. The Ditchley Foundation, in its report recognizes the good relations India maintains with a wide range of countries including Iran and Israel. The Report goes on to say that India has adjusted to a unipolar world, although it was not entirely clear in the report how pleased India had been about this development. India’s patience and tolerance of foreign activity in the region of its neighbours, despite it being a large power in the region, has augured well toward avoiding tension in the region. India’s external and internal security is linked. India’s relationship with Pakistan is paramount in the region, particularly on the touchy issue of Kashmir.
Kashmir forms only 10% of the former princely state of Jammu and Kashmir and there is growing doubt whether the interests of Kashmiris and their views have been considered in the process of the dispute. Seemingly, Kashmiris now support a doctrine of non-violence. It is hoped that an eventual solution on Kashmir would be simple and easily explicable.
One view is that increasing trade between India and Pakistan will strengthen the relationship between the two countries and alleviate security tensions that prevail. Another view is that the ability of the two parties to implement any final agreement would be in doubt until there had been internal reform in Pakistan which would give the Pakistani Government greater stability. What seems to be important is that even if there was no substantive progress for some time both parties should maintain the dialogue and not move to alternative policies.
It would be interesting to observe the development of India’s nuclear policy in the years to come. In 1998, when India conducted three nuclear tests in Pokhran, there was a dramatic shift in India’s nuclear posture which brought to bear the presence of the country in the global nuclear arena. The world ceased to view India as a fledgling in this field and brought the country to the forefront of nuclear testing and armament. These tests set off a sanctimonious outcry from Washington, London, Tokyo and Bonn, but it soon died down as India’s tests didn’t legally violate the 1996 Comprehensive Test ban Treaty (CTBT) because India was not a signatory to it. When interviewed soon after the conduct of the tests, Prime Minister Vajpayee sated to the press that the nuclear tests were conducted in pursuance of India’s policy with regard to national security. He stated further that India lived in a world where it was surrounded by nuclear weaponry and that no responsible government can formulate a security policy for the country on abstract principles, disregarding ground realities, nor can policy be based on anything but the supreme consideration of national interests. Mr Vajpayee stated that the world knew the truth about the progress – or, rather, the lack of it made by the nuclear powers in the direction of nuclear disarmament and that the world community should appreciate the fact that India, the second-most populous country on earth, waited for five decades before taking that step.
Notwithstanding that India was the first country to propose a ban on nuclear testing, it has been reluctant to be a party to global treaties that were perceived as discriminatory for the reason that these treaties allowed a few countries to hold nuclear arms indefinitely. In this context it is interesting to note that, in spite of numerous resolutions of the UN General Assembly reflecting the political will of most nations against this nuclear monopoly held by a few powerful nations, there is no global conviction to adopt decisive steps for creating a nuclear weapon free world. India’s nuclear involvement brought strength and self confidence to the country as well as a sound base for establishing itself as a standalone power that could defend itself in the years to come, and therefore it is possible that India’s nuclear policy in the years to come would be that the only solution to the problem of proliferation of nuclear weapons would be its total elimination.
With regard to relations with China, there is seemingly mutual respect and understanding between the two nations particularly in economic relations, although differences loom in foreign relations, particularly in territorial claims and nuclear programmes. It has been suggested that India could face considerable challenges in its relations with the United States if US relations with China or Pakistan were to deteriorate sharply. The way things look at the present time, it appears that the two countries will continue to progress in their own realms, China being the World’s workshop and India remaining as the World’s knowledge and information base.
Relations between India and Sri Lanka have been friendly, both countries having established diplomatic relations when Sri Lanka gained its independence in 1948. Both nations proceeded to establish extensive cultural, commercial, strategic and defense ties to establish a common sphere of influence in the region, adopting a non aligned policy to respond to the growing influence in the region by the United States and Russia. The close relationship between Prime Ministers Indira Gandhi and Sirimavo Bandaranaike was a monument to the exceptionally cordial relations between the two countries which led to robust bilateral relations and cooperation.
Both countries have an endearing and enduring relationship. In 1927, when Mahatma Gandhi visited the then Ceylon to popularise Khadi and promote prohibition, he was struck by the abiding and signal influences of India on all aspects of Sri Lankan life. Gandhi then referred to Ceylon as India’s “Daughter State” and later, Ambassador Gopal Krishna Gandhi wrote that, “few Sri Lankans are without some Indian derivation, recent or remote”.
Both countries have an indomitable reliance of their sovereignty, mutual understanding and support. There is nothing to indicate that this atmosphere of peaceful co existence and mutual help will change. Although Sri Lanka is a small market for India economically (accounting for about 2% of exports to India and less than 1% imports from India) India exports to Sri Lanka varieties of goods and services including transport equipment, cotton yarn, fabrics, readymade garments, iron and steel, machinery and instruments, sugar and wheat, drugs and pharmaceuticals, chemicals, glass and glassware, ceramics, cement and paper and wood products; and imports non-ferrous metals such as copper, spices, electronic goods, electrical machinery, scrap metal paper pulp and chemicals. Though in terms of total quantum, bilateral trade remains modest there is every indication that it shall definitely grow.
India and Sri Lanka have, over the years, created a large legal framework to further their cooperation which includes a free trade agreement; a double taxation avoidance agreement; and a series of bilateral agreements and understandings for cooperation in the areas of small-scale industries, agriculture, tourism, space and information technology and air travel facilities. Indian Oil Corporation, Taj Hotels, Apollo Hospitals, Ambujas, Tatas and Ashok Leyland are among the prominent Indian companies operating in Sri Lanka.
It is envisioned that India will strengthen its already robust educational structure by massive investments in education in the future. The vision of the country, according to a Minister in Charge of Commerce and Industry a few years ago was articulated as follows: “We no longer discuss the future of India. We say the future is India”. He predicted that India would certainly have achieved 100 % literacy, become a developed country, enjoy the same fundamentals as the United States by 2030.
As India’s closest neighbour and friend, Sri Lanka can only hope that this goal will attain fruition.

Author: Sri Lanka Guardian

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