Random Thoughts
D Dhanuraj
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This year also, monsoon shocked the Indian economy! Government declared 246 districts as drought hit districts. There are already 250 districts in India which are prone to Naxalist attacks. My interest has always been in how there is an overlap between drought hit districts and those that are prone to attacks from Naxals. Interestingly, as I wondered, most of them are on both these lists. The debate over inclusive growth is not over!! Are these monsoons a clear sign of frustration of rain Gods over the development in these regions?! Is it a possibility that lack of rains lead to the violence and firing in these regions?

Agriculture as a sector contributed to 32% of the GDP in 1990-91 and 17% of the GDP in 2007-08. Industrial sector contributed to 27% in 1990-91 and 29% in 2007-08. The contribution of the Services sector rose from 41% to 54% in the same time period of 1990-91 to 2007-08.

The contribution of the agriculture sector to GDP has almost halved in the last 18 years. It is not surprising that the total land area for the agriculture land also came down heavily in the last one decade. But not the dependency of the population for work in agricultural sector as it still accounts for 60 %. More and more job opportunities were created in service sector in the recent past. 80% of employment is generated within the construction sector and informal trade and the rest is divided between IT and ITES, Retail etc. There is always the argument that the illiterate farmers cannot be employable in service sector. A counter argument to that would be that among the people working in the services sector, 90% do not have basic elementary education and 30-40% of people are completely illiterate. So the real question is whether a really bad monsoon season would have really lead to suicides if suitable efforts were taken. Given the nature of political economy the nation has witnessed in the last six decades, one wonders what the solutions to improve these areas are.

Seven companies made it to the list this year. The same seven entities were part of the same last year as well. The companies that made it the Fortune 500 list are Indian Oil (Global Ranking: 105 with a revenue of $62, 993 milllion) Tata Steel (Global Ranking: 258 with a revenue of $ 32,018 million), Reliance Industries (Global Ranking: 264 with a revenue of $31, 792 million), Bharat Petroleum (Global Ranking: 289 with a revenue of $ 29, 989 million), Hindustan Petroleum (Global Ranking: 311 with a revenue of $ 28,247 million), State Bank of India (Global Ranking: 363 with a revenue of $ 24,578 million) and Oil and Natural Gas (Global Ranking: 402 with a revenue of $ 22, 725 million)

These are only a few glimpses of Indian Companies that have made their marks in the international league. The present projection of 6.3% growth rate in GDP for the current fiscal is based on the assumption of 2.5% decline in farm sector output due to drought conditions. Comparing with what Bharat Nirman and NREGA is expected to achieve in terms of increasing employment opportunities and the resultant social upliftment; Indian companies have more to offer to its people, leave alone the argument related to social responsibility. They have budgetary outflow and receipts of Rs. 18,696 crores and Rs. 39, 100 crores respectively. Lack of basic amenities indirectly mean ample business opportunities. Why doesn't each company adopt one district each and set its development goals? Let agriculture prosper while Naxalism will have less number of buyers.

Electricity, water, roads and affordable housing are the key areas that require immediate attention. Kapda(Clothing), Paani (Water) and Sadak (Roads) are always ever-green promises of politicians. The premise that these can be offered only by the State has a lot of buyers. Some do suggest that the private companies can deliver it. But where the service delivery systems are bad, no private agency would be interested to offer these services. An example is health insurance where it is difficult to provide health insurance to villagers not because of their culture and character but more importantly the service providers like Government hospitals and doctors are absent in most of the cases. And in these situations if any private agency offers health insurance without ignoring Dr. Amartya Sen's 'The idea of Justice', will end up in bankruptcy. The villagers may get money but not good doctors and hospital beds. Beyond the argument of whether the State failed to offer these services, it is a matter of morality in governance. Deputy Chairman of the Planning Commission states that at least Rs.70,000 crores are required for a decent progress in infrastructure development. It is at this juncture where India's "fortunate" companies can play significant roles. They can float bonds or Special Purpose Vehicles (SPVs) most of the times to support the adopted district or town. Instead of giving tax exemptions and special privileges to companies, why don't we get these companies to facilitate development processes? This is what Dr Sen says as the defining role of Justice which can be supported only by a philanthropic society which would transform from an institutional society to a practical or a real one.

D Dhanuraj is the Chairman, Centre for Public Policy Research, Kochi, India

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