India Economic Summit (Dec 5-7, 2004, New Delhi, India)

By: KeithTimimi   Date: 8 April 2010

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KeithTimimi

The free-spirited family-man internet entrepreneur who fell in love with the study of economics. And

Keith Timimi, Contributor

 

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Over the past few years, India has chosen for itself a path of high growth through economic reforms, which clearly benefited the country. But it will be difficult to achieve the targeted growth of 8% GDP unless agricultural growth is doubled from the present rate of 1.8%. Since 72% of the population lives in rural India, it is imperative to increase agricultural growth and make agriculture more efficient. India needs a fundamental re-direction of agricultural growth patterns by moving away from cereal-based production to diversified productions in horticulture, poultry, floriculture, etc. Indian states need legislative and policy changes to allow more diversified growth.

Presently, there is a lot of resistance to corporate farming; certain political and legislative changes are needed to encourage contract farming. The Essential Commodities Act has to be amended to allow the private sector to help in marketing. The Planning Commission proposes to suggest certain changes in the agriculture policy, as part of its mid-term economic review. This will make it more comprehensive including allied sectors such as poultry, fisheries and livestock. It is important that funds allocated to agriculture must be spent on creating infrastructure projects like irrigation, linking rural roads, etc., and not on farm subsidies.

The second focus area is infrastructure, if India wants a growth rate of 8 % or above. Special efforts are needed to overcome infrastructure deficiency, for which both public and private investment is necessary. Also, emphasis must be given to strengthening the manufacturing base, as a development strategy, which relies on a services revolution for growth, is not sustainable. Thus placing priority on social sectors, agriculture and infrastructure is urgent. Improvement in human development indicators like primary healthcare and primary education, in which India lags behind, is imperative to higher growth. India needs huge investment in rural electrification, rural connectivity and improvements in urban infrastructure. It was indicated that the central government would provide resources to state governments and also make local authorities more accountable.

Despite India's growing IT industry presence worldwide, domestic IT growth lags behind with a high cost of access to connectivity in most areas and no connectivity in some areas. Also, India needs to improve its infrastructure-airports, power and roads- and further develop its manpower.

There exist a positive relation between knowledge workers and economic zones. Knowledge workers prefer to stay near cultural and entertainment centres rather than in remote locations. India should go up the value chain and promote public-private partnerships for infrastructure development. Foreign companies are interested in India because of the rapid growth of its large talent pool and the low cost of operation. India should invest


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