By R. N. Bhaskar

April 13, 2006 (This article appeared in the DNA); pdf version

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Farmers are being shortchanged for their produce. Purchasing power with the largest segment of India’s population remains woefully inadequate. This could cause tremendous social (and political) discontent all over the country very soon.

Unless private investments are encouraged into primary and secondary education on a massive scale (at least tree times the current outlay), India could see business coming its way that local populations cannot effectively address or service.  Businessmen will try coping with such opportunities by employing people with sub-standard skills, which will only give India a bad name.

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Industry associations normally celebrate when the country’s GDP indicators are on a growth trajectory. But the furrows on the brows of most of India’s biggest industrialists suggest that there is a cause for anxiety, even alarm.  While there is undoubtedly a cause for jubilation at the impressive increase in India’s GDP growth rates, all is not well on this front.

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Take some basic numbers first (please see table). <> 
 

 

Look at the agricultural sector first as it accounts for almost 60% of India’s workforce and around 70% of India’s population.  Do observe how its contribution to GDP has declined from 31% to 22% on a nationwide basis during the past decade, but even more worryingly from 20% to just around 13% in Maharashtra. 

<> While the contribution of agriculture to India’s GDP is on account of the impressive growth in its service sector (from 43% to 51% for the country, and from 47% to 57% for Maharashtra), it also means that agricultural prices could not keep pace, and that agriculture continues to be shortsold.  Then consider these figures against the backdrop of farmer suicides in many states, and more particularly in Maharashtra, and it becomes even clearer that the farmers are being shortchanged for their produce. It also means that the purchasing power with the largest segment of India’s population remains woefully inadequate. <> 

This could cause tremendous social (and political) discontent all over the country very soon, unless ways are found to increase the value-added component for India’s rural folk, and also to create jobs in rural areas so that the purchasing power of rural folk increases. <> 

But there is an even more worrying factor, brought out by the TISS-CII report on “Livelihoods, Employment & Sustainable Development” released in March this year.  It points out that the growth in the services sector has not been matched by adequate increase in people who can communicate well, and who have market friendly skills.  This is because over the last 50 years, most state governments, and the central government, have ignored issues relating to the upgradation of standards at the primary school level, woeful salaries to teachers at all levels, (causing teachers to drift away from teaching to other better paying professions), and demeaning the position that teachers once enjoyed in the social hierarchy (one constantly hears of teachers and principals being beaten up, and the miscreants not being apprehended).  In Maarashtra, a fresh school teacher is given half the salary of a peon, and there are stories of salaries not being paid for months, because the government has not disbursed the funds to schools and colleges under its grant-in-aid formula. <> 

What this also means is that unless private investments are encouraged into primary and secondary education on a massive scale (at least tree times the current outlay), India could see business coming its way that local populations cannot effectively address or service.  Businessmen will try coping with such opportunities by employing people with sub-standard skills, which will only give India a bad name.  <> 

Don’t be surprised, therefore, if India’s economic boom withers away as quickly as it has emerged, if the development of skills is not addressed immediately.

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