Thought for the day
“The happiness of society is the end of government.”
-
John Adams (American, 1735-1826)
Word for the day
Hoodwink (v)
To deceive or trick.
(Source: Dictionary.com)
Teaser for the day
Should we do away with the “session” system of the
Parliament?
Utopia: The economic problem-III
In my view, the root of the economic problems of India could be easily
traced to the continuation of the exploitive colonial economic model post
independence. We have consistently failed in exploiting our strengths and
allowed outflow of precious resources both natural and human.
Even after 66years of independence from British rule, India
continues to be mostly an exporter of raw material and cheap labor and importer
of technology and end products. Though in recent past we have excelled in a few
areas like automobile, pharma and space research, still most of our industry is
built around arbitrage opportunities available in terms of natural resources
and abundance of cheap labor.
Consequently, a strong structural base for the Indian economy is
yet to evolve. We have not been particularly successful in the areas such as technological
advancement, productivity gains, innovation and localization and mostly
continue to be an economy largely dependent on labor & resource arbitrage
and trading.
In my view, we have focused too much on our weaknesses and tried
hard to overcome by importing technology, energy, intellectual property,
capital and consumption patterns. As S. Gurumrthy recently highlighted in
one of his writings, the primary cause of structural imbalance in trade account
appears to be humongous capital goods import in past 10yrs rather than gold or
oil import as widely believed.
In particular the following five “mistakes” have created many
structural problems for Indian economy:
(a)
“Feudal ownership” of resources in the garb of
“public ownership” has led to criminal waste, misuse and misappropriation of
natural and financial resources.
(b)
Neglect of sustainability concerns in developing
industry has led to concentration of economic power and therefore political
power. Besides, the accelerated environmental degradation has caused serious
damage to the ecology.
(c)
Lack of a holistic education and training policy
has created serious demographic distortions. Serious gender inequalities have
crept in the system due to largely male focused system (though things have
changed in past couple of decade but still far from the desired level). On one
hand we have a huge pool of unemployed youth, while on the other hand entire
industry is facing shortage of skilled workers.
(d)
The colonial mindset has destroyed the
traditional knowledge and skills. Lord McCauley still successfully rules the
education system, making India a perennial importer of technology and other
intellectual property.
(e)
A faulty approach to urbanization has created
immense inequalities. The famous India and Bharat divide is now part of
folklore in international studies. Instead of providing civic amenities to the
quintessential Indian village that was center of traditional industry, the
industrial policy has caused destruction of rural economies causing large scale
migration.
Earlier
in this series:
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