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Journalism of Courage
I am just wondering if I am sitting at a panel discussion in the US, said Harold McGraw,chairman,president and CEO of McGraw Hill Companies,US,who is also a member of Indo-US CEOs Forum,reacting to a discussion on inclusive growth in India at a morning session in the World Economic Summit at Davos.
Not just India,the debate on rising income disparities and concentration of wealth in the hands of a select few have dominated the polity in the US and China too. In fact,at the session moderated by The Indian Express editor-in-chief Shekhar Gupta,a Chinese delegate said it was to Indias credit that inclusive growth became a part of his countrys official policy agenda.
Deputy Chairman of the Planning Commission Montek Singh Ahluwalia said despite many critics,Indias economic reforms initiated two decades ago had unambiguously resulted in catapulting the growth rate to a new orbit of 8-9 per cent now. And the bottom one-third of the population is much better off today than what it was earlier, he said. But its not just enough to have growth,we need to make it inclusive. For McGraw,inclusion meant giving all an opportunity or access to prosperous standards of living,and it had to begin with education. But,in India,according to Ingrid Srinath Narasimhan,secretary-general of Civicus,a global NGO,many social indicators had only worsened child malnutrition has,for example,remained stagnant since 1993. It was 47 per cent then,and in 2007,it continues to be 46 per cent.
To what extent opportunities are available is still determined by identity in India, she said. The deficit that needs to be addressed is the democratic deficit,Narasimhan said,adding that growth has changed life beautifully for only a small set of people. For the bottom one-third,it has only worsened,she said,which Ahluwalia would not agree. To the extent its measurable,real consumption of the bottom one-third is improving, he countered.
The government has been putting more money on education,Ahluwalia said. There has been 100 per cent enrolment,but drop-out rates are high. The focus now is on increasing the quality of education to enable them to compete and get included,he said.
Besides education,there is a growing feeling that skill development is equally important,said another panel member Hari Bhartia,who is also the president of the Confederation of Indian Industry.
Need flexible labour laws to create more jobs
The government is convinced that it was imperative to make labour laws more flexible if the countrys manufacturing growth has to accelerate to about 12-13 per cent. But,trade unions need to learn from China to allow for more labour flexibility.
Ahluwalia said the manufacturing sector in India had not grown at a pace the government would like it to grow. If we cant achieve 12 per cent growth in industry,then we will not be able to add significantly to the employment numbers, he said,adding flexible labour laws have to come along with enforcement of labour rights.
Responding to a question from a senior executive from the UKs Financial Services Authority where is the employment in India coming from?,Ahluwalia said clearly India cannot grow in manufacturing the way China did. China has added huge jobs in manufacturing because of robust exports. In India,this has not happened because infrastructure isnt good enough in the country. Further,labour laws do not allow large scale employment in labour intensive sectors, he said.
