India celebrated its 6th decade of
independence in August, 2007. It was a time for domestic congratulations
in light of an economic growth rate that has boosted the country’s rise
to the status of a global power. Many analysts, however, took the
occasion to look beyond the "India Shining" public relations campaign
that has bolstered India’s claim to be a leading financial and service
sector, or one that continues to attract business process outsourcers
due to the presence of lower-cost. educated, urban job applicants with
English-language skills.
Job transference is increasingly contested in
the West. In India public officials have given considerable recognition
to the fact that their nation’s rise has not been accompanied by the
inclusion of over 66% of its rural, agricultural population into what
remains a wealthy, urban, and ultimately measured, social and economic
constituency given India’s more than 1 billion in population. A recent
report by the Asian Development Bank underscored two critical features
of the Indian, and other emergent economies. First, a policy emphasis on
urban development has left rural areas lagging in growth with a major
result being a growing migration of unskilled poor to city centers.
There, the lack of appropriate skills renders them incapable of being
absorbed into expanding employment markets.
A second critical feature of India’s growth
path has been the absence of any strong evidence that wealth is being
redistributed downward. The anticipated effects of a hoped for
"trickle-down" movement has not occurred, resulting in a situation where
relative poverty has been on the rise since the early 1990’s. The ADB
stresses that unless growing rural and urban poverty is alleviated,
already complicated patterns of social cohesion will undergo further
fragmentation.
Public responses to India’s compelling
challenges are many and varied. What are essentially affirmative action
campaigns have been launched in attempts to ease economic mobility of
spiritually- derived caste members. Though legal regulations have met
with some success in certain local areas, access to skilled employment
or education for the professions has brought vehement, often violent
protest, along with doubts that equal access policies will be everywhere
sustainable in the future. Moreover, the geographic distribution of
large foreign investments into Special Economic Zones (SEZ), once a
hallmark of Indian economic development, is also under review in light
of the disruption and displacement of local populations that has
accompanied their growth. At the core of Indian policy development is
the growing visibility of a striking "wealth gap" that now stretches
from urban to rural spaces as well as across diverse regions. India’s
leaders have made it clear that the concept of "India Shining" needs
clarification, and that overall national prosperity, rather than lengthy
development lags among economic and social sectors or between class and
caste, is a needed economic template.
External Viewpoints
The European Commission’s modest relations with
India involve the transference of Euro 250 million for the purpose of
fostering health and education in poorer rural areas. Funds are being
distributed through a single State’s administrative offices,
non-governmental organizations, and a number of private enterprises. The
program, which began in 2002, hopes to spread to additional Indian
States committed to reforms and efficient service delivery. Japan’s
recent response to India’s challenges foresees a $90 billion investment
focused on the construction of an industrial corridor that connects
Mumbai and Delhi. The corridor is expected to provide space for
manufacturing as well as service centers, and for the development of
associated small and medium -sized businesses. Japan’s investment also
promises a shift in geopolitical alignment, with India linked to an
existent Australasian network that includes heightened Australian and
Japanese security agreements.
The US –Indian engagement features a treaty
allowing the sharing of nuclear fuel technology with a sub-continent
much in need of energy resources, in particular of dependable electrical
supply grids. However, a realistic appraisal of the treaty’s future is
itself dependent on ultimate approval by a fragile coalition government,
many of whose members question an agreement that would dampen India’s
independent voice in world affairs. Prime Minister Dr. Manmohan Singh’s
recent statements indicate a firm belief that doubts about nonalignment
should not outweigh the promise of necessary infrastructural advance
that inclusion in a partnership with the US, and in the nuclear
mainstream, would bring.
Private Sector Agendas
Private corporate investment in India not only
involves a quest for further inexpensive BPO sites in urban areas.
Investment models also encompass increased purchasing power for a
diverse number of materials, made both in India and exported, or
imported from abroad. Urban sites have here been highlighted and,
according to the ADB survey, have been a prime factor in increasing the
distance in relative wealth between rural-urban locations and among
India’s regions. A contrast in focus is nevertheless emerging as both
India’s and foreign corporations realize the export potential of the
country’s vast yet still impoverished agricultural areas. Envisioning
India’s growth potential as a major exporter of agricultural produce to
Europe and other northern climates, corporate models are now oriented
towards the resolution of the complex, contemporary problems surrounding
internal and external market development. One more publicized effort is
a joint entrepreneurial and philanthropic enterprise in research that
seeks to overcome problems of a lack of cold storage and shipment delays
from rural to urban markets and abroad.
Linked to this effort is India’s expanding
supermarket retail sector as well as planned cash- and –carry wholesale
outlets that represent a joint effort between Indian entrepreneurs and
global discount marketers well-known in the US and Europe. To date, such
links have built upon those Indian companies successful in minimizing
difficulties in telecommunications in vast rural areas. An additional
tie is built on a negative—that Indian retailers are limited to single
brands, so that the evolution of a wholesale sector that is
multi-branded is both available and fills what developers feel is a
vacuum in distribution and supply.
Though construction and utilization of retail
shopping malls has been ongoing for over a decade, additional wholesale
cash-and-carry outlets aim initially at attracting both individual and
institutional clienteles derived similarly from already upwardly mobile
groups. Their promise lies in an ability to deal directly with
agricultural produce shipped from the countryside according to
developing research models of cold storage and efficient delivery
schedules that lack today’s significant delays and spoilage. The model
notably foresees needed rural employment growth and the country’s
emergence as a major agricultural exporter to both the developed world
and other emerging economies.
Nevertheless, even at a current incipient
stage, such efforts are already being met with doubt among realistic
planners and public alike. In question is the fate of India’s millions
of Mom and Pop outlets that now sell agricultural produce in both rural
and urban markets, and which are seen as vitally compromised by joint
domestic and foreign activities. Millions of unemployed are projected
despite arguments that small family firms will eventually rally and
survive by diversifying sales and locations according to competitive
market principles. Additional positive arguments thrive on general,
overall prosperity themes now embedded in widely-recognized official
statements. It is not yet known at what pace wholesale outlets leading
from rural agricultural sectors to suburbs and cities will take place.
But public demonstrations against what is increasingly viewed as a
potential, precipitous decline in small family businesses and their
millions of dependents are becoming more frequent, and have served to
slow enterprise establishment beyond a preliminary research and
development phase.
Overview
Any brief guide to India’s complex, energetic
growth has come to rest on reliable surveys that clearly document a
general economic advance accompanied by a striking drop in employment
and income -access in already impoverished urban and rural districts.
Public relations achievements are increasingly viewed as needing a
robust injection of realistic policy that will prove fundamentally aware
of current disparities, and project a future that does not serve to
further growing social and economic divides.
Inherent in the ADB’s report is that
"globalization," in its many forms, can be an integral part of
problem-solving. Also implied in the survey is the fact that a political
agenda that now appears more reactive than prospective needs
stabilization, focus, and coherence. External investments provide a
framework for successful development for a relative few in both the
short and long-term. In addition, coordination of corporate investment
strategies remains essentially absent, if not without accountability,
for their less than predicted results. The outcomes of
agriculturally-linked retail and wholesale growth are now being
considered, but are largely based, as is other investment, on ad hoc,
experimental models.
Broad foreign policy initiatives are acting to
include one of the world’s fastest growing economies into a geopolitical
agenda that emphasizes a western orientation. Their sustainability
appears dependent on India’s continuing capacity to channel the division
and dissent arising from the consequences of eclectic investment and
development planning into that country’s vibrant democratic political
institutions. Sustainability may also rest on the evolution of western
foreign policy outlooks that are actively decoupled from an established
pattern of economic growth that is now looked on as having a potential
to dramatically widen a wealth gap both in the West and in India itself.
December 1, 2007
