Thursday, February 22, 2007

The Rise of India

The Rise of India, a new book written by Niranjan Rajadhyaksha, offers insightful perspectives on how India reached its current level of economic prosperity, warts and all. An editorial-page editor with Mint, a new financial daily in India, Rajadhyaksha uses wide-ranging interviews and hard data to back his arguments.

In an excerpt from his book, published on Wharton University site, Rajadhyaksha argues that new solutions are needed to tackle poverty, including moving beyond squabbling over how to best measure it and toward more equitable income spreads. He also describes the ill-effects of globalization and argues that poverty has more to do with unproductive employment than unemployment.

To read the article click the following link:

Some facts and figures...

  • Between 1950 and 1980, Average incomes rose by a mere 1.2% a year. Average incomes have increased by over 4% a year since 1991.
  • According to the International Energy Agency (IEA), in 2002, India had one of the most energy-intensive economies in the world -- 2.88 times that of the rich countries. So India needed nearly three times more than an average rich country to produce an equivalent amount of output. (the energy-intensity of an economy is the amount of energy needed to produce one unit of GDP)
  • China, whose economy is powered by manufacturing, is less energy-intensive than India. India's energy intensity is almost 24% higher than China's, despite the fact that both countries are at the same level of development.
  • Austria's energy consumption in 1992 was the same as it was in 1973, though industrial output was up 70%.
  • Agriculture accounts for barely a quarter of the Indian economy but employs about 60% of the labor force.
  • Economist Omkar Goswami and marketing consultant Rama Bijapurkar have constructed a detailed representation of rural India based on economic, demographic and consumption data from 530 districts in the country. They say that rural India accounts for 52% of India's GDP. They break this into the three basic components: agriculture accounts for 46%, industry for 21%, and services for 33% of the rural economy.
  • The 1991 census showed that only 30% of rural households lived in permanent houses. Ten years later, the next census shows that 41% of rural households have decent housing. (This fact is contrary to the politically attractive view that the whole of rural India is suffering because of problems on the farm)
  • According to estimates by Ifzal Ali, chief economist of the Asian Development Bank, one unit of economic growth created 0.384 jobs in the 1980s and 0.312 jobs in the 1990s. This shows that the ability of the Indian economy to create new jobs has undoubtedly diminished in the past 15 years.

No comments: