The distributed growth model . A keynote delivered on the invite of the World Bank in Algeria in June 2018
The distributed growth model . A keynote delivered on the invite of the World Bank in Algeria in June 2018
“Distributed Growth model” is the need of the hour. Growth alone will not suffice.
India’s budget preparation is in the final leg and it will be unveiled soon. Last two budgets have put the focus correctly; by giving thrust to rural development, agriculture and infrastructure, but the bureaucratic red-tape has been an impediment. We have a long way to go and we need to evolve a new model – the ‘Distributed growth model’. All these decades, we have chased the ever-elusive “double digit” growth, but we are not going to achieve that with the current approach.
“Too many economists spoil the budget”. We had a world-class economist running the country for a decade, we had the best economists running the RBI and the erstwhile Planning Commission, and we still could not achieve double digit growth, and floundered. So, it’s time to have a fresh look at our economic approach. A mere change in the interest rates have not done anything, and will not. Economy is not about tax collections, interest rates or money supply alone, it is much more. ‘Text book economists’ do not understand the country’s complexities, and neither they do good to the economy, or to economics. Also, the general perception is, that only 3 % pay taxes. Yes, 3 percent may be paying direct taxes but every citizen of India pays taxes indirectly when s/he purchases a product from the market. With GST implemented, all the more! So, to use this reason of low tax payer’s base is wrongfully placed.
It is time we considered a model that leads to growth which percolates downwards and spreads wide, that what I call as, ‘Distributed Growth model”. How do we make it happen?
Let’s look at the following data;
Health & Education
Recent study had revealed that 50 million go below poverty line due to healthcare costs. Also, it is a known fact that most of the ‘educated’ are not ‘skilled enough’ to do the jobs that the country needs as its economy evolves. Hence, education and health needs investment. If the workforce is not healthy and competent, how can the economy be strong? In fact, anecdotally (since I am not an economist by training), I would take the liberty of stating that GDP growth would be equal to the GDP spends on education, and health! Our healthcare system and education system is in shambles and it needs massive investment. For achieving ‘distributed growth model’, investment in health and education are a precondition.
Strongest thing about India’s economy is ‘1.34 billion consumers’, who run the consumption story (growth engine) for the country, and we add about 18 million new consumers every year. With more opportunities for consumers from Agriculture, MSME and Tourism; and assuring them with quality health and education; we will fire the economy to grow 10 percent a year, and that too, sustainably.
I see foreign trained economist keep warning India about the Fiscal discipline. If the investments are going in areas outlined above and not in opex, we must not worry. Even if the fiscal deficit reaches 5 percent, investments in these sectors will payback, and our economy will be amongst the 3rd largest in a decade. USA is a case in point. It is too big an economy and though its fiscal arithmetic is baffling, does it worry about its ratings or deficit!!?
In oil rich Gulf countries, GDP and GDP per capita appears fantastic as statistics, but since the oil fields are in the hands of a few royal families, the wealth gets concentrated in a few hands. Recently, the annual Oxfam survey has found that the wealthiest 1 % Indians garnered 73 % of the wealth created in 2017. This is due to the ‘Concentrated Growth model’. So growth alone with not suffice , and we need ‘distributed growth’. In the “Distributed Growth” model lies the answer. India should move to this model before the gap between ‘have’s’ and ‘have nots’ increases more!
What the policy makers must aim is on enhancing the income and money in the hands of consumers by creating more avenues to work, earn and spend. This will happen if we invest in agriculture and value addition in allied agro based industries, MSME, tourism, infra, health & education.
Lastly, let us not forget, electorate will evaluate Modi government’s performance on health, education, employment, electricity and inflation. These hold the key to a massive win in 2019.
Good economics is long term politics!
Rajendra Pratap Gupta is a leading public policy expert. Views are personal
India is a foodie nation, and with the rising middle class, our eating habits are changing. There is an increasing tendency to eat food outside, and India, predominantly being a middle class nation, our preference is for road side eateries and small or mid size restaurants. But what goes unnoticed is; the newspapers used in packing food items, or the printed material on tea bags, and the potential dangers associated with them.
It is a fact, that the newspapers are printed with ink that is dissolved on it with the help of chemical solvents. Studies have shown that printing ink from newspapers can easily gets into foods wrapped or served in them and this is dangerous for health. The solvents used in ink are potentially carcinogenic.
Also, newspapers and cardboard boxes used for packaged foods are made of recycled paper, which may be contaminated with harmful chemicals like di-isobutyl phthalate and di-n-butyl phthalate that can cause digestive problems and also lead to severe toxicity.
It is a fact that the recycled paper used has printing ink residues. These un-cleaned residues have found to contain hormone disruptors like benzophenones and mineral oils which can interfere with reproductive cycle of women.
Through the print based packaging, there is an exposure to organic chemicals called aryl amines, such as benzidine, Naphthylamine and 4-Aminobiphenyl, which are associated with high risks of bladder and lung cancer. Apart from these, printing inks also contain colorants, pigments, binders, additives and photo-initiators, which have harmful effects.
It is also believed, that the mineral oil-based printing inks for newspapers contain mineral oils, which consists of various types of hydrocarbon molecules that can exist as Mineral Oil Saturated Hydrocarbons (MOSH) and Mineral Oil Aromatic Hydrocarbons (MOAH). These hydrocarbons usually convert into gases by evaporation that eventually penetrates food items.
Newspapers are usually produced by a system called offset-web printing, which requires a certain consistency of the ink (it needs to be very thick) and a particular means of drying. For the former, mineral oils (petroleum-based) and solvents such as methanol, benzene and toluene are used; and for the latter, heavy metal (Cobalt)-based drying agents are used. None of these should be used in food packaging, as they are also classified as harmful and can be dangerous for health if consumed.
According to the FAO / WHO, Joint Expert Committee on Food Additives, the safe upper limit for the MOSH in foodstuffs is 0.6mg/kg. Older people, teenagers, children and people with compromised vital organs and immune system are at a greater risk of acquiring cancer-related health complications.
Another problem lies in the plastic bags used in takeaways. These bags are made of polyethylene (polythene) and the principal potential ‘migrant’ agent is ethylene. There are a number of potential additives to polythene, such as anti-static agents, ultra-violet protection and flame-retardants. These additives can be very dangerous if they find way into the takeaway food, which usually happens.
According to an article in the British Medical Journal, ‘Food packaging and migration of food contact materials: will epidemiologists rise to the neotoxic challenge? J. Epidemiol’ by Muncke J, et al. (Feb 2014), scientists say that most food contact materials (FCMs) are not inert. Chemicals contained in the FCM, such as monomers, additives, processing aids or reaction by-products, can diffuse into foods and this chemical diffusion is accelerated by warm temperature, and in India, the temperatures can touch as high as 45 degrees Celsius.
The scientists believe that FCMs are a significant source of chemical food contamination. As a result, humans consuming packaged or processed foods are chronically exposed to synthetic chemicals throughout their lives.
Formaldehyde, another known carcinogen, is widely present at low levels in plastic bottles made of polyethylene terephthalate. Other chemicals known to disrupt hormone production and used in food and drink packaging include; Bisphenol A, tributyltin, triclosan and phthalates.
There is an increase in the use of tea bags, and while using teabags, sometimes people squeeze the teabag using the label at the end of the loop. This can leak the ink from the label. I would recommend that the guidelines be framed and implemented to warn people of the same and prevent this practice
I also suggest that based on the facts available, it might be worthwhile banning the use of plastics, recycled materials and newspapers for food packing.
The FSSAI must act immediately and frame guidelines to control wrapping of fried foods in newspapers, banning the use of plastic bags for takeaways, and other practices that are harmful.
Further, it must mandate the use of ‘food packaging grade’ butter paper or aluminum foil for packaging food. We need to act on this without losing any further time
DISCLAIMER: The views expressed are solely of the author and ETHealthworld.com do not necessarily subscribe to it. ETHealthworld.com shall not be responsible for any damage caused to any person/organisation directly or indirectly.
Decade under the UPA I & II can rightly be summed in one line, the ‘Decade of Decay’, in which India had a free fall on all fronts – be it economic failure, diplomatic humiliation, failure of foreign policy, intrusions across borders, corruption & scams or crimes against women. There has been gross misuse & total denigration of government & constitutional institutions and this has eroded the office of the Prime Minister. The Government dithered by each passing day, casting gloom and doom on the country that was once under the NDA regime called the ‘Emerging Super Power’. In 2004, NDA left the Government with 8.1 % growth. The UPA could not even maintain that growth and mismanaged the country so badly, that the growth rate declined to 4.8 %, with the nation in a deep mess. We have lost a wonderful opportunity and have pushed the nation 20 years behind and rendered millions jobless and hopeless.
CAD now exceeds even 1990-91 Level – India is revisiting the crisis of 1991.
Between 2001-02 and 2003-04, the nation had a pleasant experience on balance of payments, turning surplus for continuously three years, which was unprecedented after the post-independence period. All the gains of the NDA period have been frittered away in saving the dynasty rule through various election-financing schemes
Total public debt on India is Rs 4,606,350 crore, and the debt per capita stands at about Rs 38,000
Economy is slowing down and the banks are under strain. Defaults have led to NPAs almost doubling from the 2009 levels. Rs. 2.43 lac Crore of estimated NPAs are in 40 listed banks as on December 2013. Rs.4.0 Lac crore is the amount of restructured loan under the CDR scheme.
The Indian rupee, which was at par with the American currency at the time of Independence in 1947, has touched its historic record low of below 68.80 against the dollar under the UPA
The employment generation actually decreased sharply between 2004-05 and 2009-10, especially when compared to the earlier five-year period.
In the five years from 1999-2000 – 2004-05, NDA created 60.7 million new jobs against the 2.76 million new jobs between the years 2004-05 to 2009-10 under the UPA. Now, India is going to lose more jobs in the coming years due to the wrong policies of the UPA
416 million poor, 316 million illiterate & more than 600 million population without toilets sums up the outcome of the economic policies followed by Congress
India continues to be one of the hungriest nations in the world & accounts for 42 per cent of the world’s underweight children.
India’s Human Development Index rank has a negative trend for the time period 2007-12, which indicates deterioration in the indicators determining the Human Development Index.
Whenever it came to low rate of growth, UPA justified that it was due to global economic situation, but the same cannot be justified for the increasing food prices in India. In November 2013, the Food Prices Index fell by 4.4 % globally, while in India, the Wholesale Price Index (WPI) was estimated to be close to 20 % in November 2013.
On one side, we have European Union’s inflation rate declining to a four-year low, and on the other side, UPA is groping in the dark for the past decade to find a solution for inflation and deficits. Country’s growth that reached near double-digit due to initiatives of the NDA government has come down to 4.5 %, that too remained because monsoons played a face saver and there was a high growth in agriculture ( 4 %). Year 2013 had an unusually good monsoon favoring a good agricultural yield, but had the monsoons been average, the growth would have been below 3 %. It was the agriculture & not the Government Policies that saved the nation from a collapse!
Health and education are defining sectors for equitable human development and sustainable and inclusive economic growth of India.
Despite levying a tax to fund education and enacting a law to ensure access to education for all children between the ages of 6 and 14, the government hasn’t succeeded in improving the learning outcomes in India’s schools, because the UPA thoroughly bungled the Sarva Shiksha Abhiyaan initiated by the NDA.The quality of learning has either shown no improvement or actually worsened in the nine years of the UPA’s rule
Recognized as a critical element for India’s growth, the UPA government had claimed way back in its first term, that 6% of the GDP would be spent on education, which is a bare minimum for an emerging economy like ours. Nonetheless, the sector still stands at around 4% of the GDP today.
It is unfortunate, but the UPA government and the Ministry of Human Resource Development have surely missed the focus on Education and Employment, and the Research & Development expenditure has stagnated under the UPA.
Healthcare is still inaccessible and unaffordable to the masses. Out of pocket spending is still high at 78 %. Goals set forth under NRHM have not been achieved and the scheme has floundered. UPA has failed to deliver health, or healthcare, despite a huge spending.
Due to lack of investment (both public & private) in agriculture, the share of agriculture in GDP has dropped to less than 15%. UPA has failed to increase investment, productivity & profitability of agriculture, leading to farmer suicides, migration from agriculture and widening the urban-rural divide. The Nation is left at the mercy of rain Gods!
The past decade has witnessed, a directionless Indian Foreign Policy under the UPA I & II; of alienation and antagonism in relations with South Asian neighbours, & of international humiliation. India has been miserably failing in accomplishing its national interest due to poor diplomacy
India has slipped to 60th position in terms of its competitiveness globally. This is India’s lowest ever rank and also 31 place below its peer emerging market -China. With regards to GCI, India is placed at 60th position out of 148 economies
India is ranked 134th position out of 189 countries in terms of ease of doing business
Transparency International’s Corruption Perception Index in 2012 ranked India at 94, out of 176 nations
In the global happiness-ranking list, India stands at rank 111-much after Pakistan (rank: 81) and Bangladesh (108).
International rating agencies have been warning that India’s Baa3 rating is in danger of a downgrade, which has vitiated the investment climate. Any further downgrade would club the economy with junk-grade countries.
The fiscal profligacy of the UPA government has put India into a tight corner when it comes to repayment of borrowings. Government bonds worth Rs 1567 billion (Rs 1,56,700 crore) is coming up for redemption in fiscal year 2014-15 & In the fiscal years 2015-16, 2016-17, 2017-18 and 2018-19, government bonds worth Rs 114600 crore, Rs 231200 crore, Rs 256700 crore and Rs 242400 crore are coming up for redemption, respectively.
Erosion of moral and societal values and governance
Crimes & corruption are on the rise across the nation and scams have impacted all the sectors like Panchayat, Housing, Education, Health, Agriculture, Mining, telecom etc. No one is untouched from corruption in the UPA regime
Corruption has become a part of the daily life. There is hardly any day when we do not come across the cases of flourishing corrupt practices getting exposed in one form or another. The policies of UPA have resulted in fast degradation of moral, societal,and cultural values
Use your right to vote to seek a change for a better India
Rajendra Pratap Gupta
Please see the total debt , interest and principal payments by the Government of India . Still do you think that we can pull this country out of the mess under the UPA ? We need radical changes
As per data made available by the Ministry of Finance on debt vide RTI dated 13th May 2013 letter dated AAAD/COORD/ L(1)2012; AS ON 31/12/2012
Government Loans :
Total multilateral debt is INR 2,401,829,740,367
Total bilateral debt is INR 1,046,418,091,740
Total Government loans ( multi-lateral and bilateral ) is INR 3,448,247,832,107
Non – Government loans
Multi-lateral INR 302,495,682,321
Bilateral INR 190,240,677,456
Total Non-governmental Multilateral & Bilateral loans – INR 492,736,359, 778
Grand total ( Government & Non-Government ) 3,940,984,191,885
Total yearly payments of interests & principal
2011-12 2012-13 ( 01.04.12 – 31.12.2012) Figures in 1000 INR
Interest 2425686378 2028398390
Principal 34823428250 24641868095
On 4th June , 2013 , I analysed the data and concluded that the Indian economy would grow below 4 % when most of our economists were speaking of returning to 6-7 % growth in the second half 2013 . https://commonmansblog.com/2013/06/04/the-titanic-is-sinking-can-we-do-something/
Leading global organizations like IMF / OECD have given similar predictions about Indian economy after 4-5 months of my analysis about the Indian economy
The recent reports of IMF on October 9, 2013 cut the India’s growth to 3.8 % in 2013 http://articles.economictimes.indiatimes.com/2013-10-09/news/42864491_1_world-economic-outlook-growth-forecast-global-growth
Also , OECD stated on 19th November, 2013 that India would grow at 3.4 % http://www.bloomberg.com/news/2013-11-19/oecd-cuts-global-growth-forecasts-on-emerging-market-slowdown.html
On one side , we have European Union’s inflation rate declining to a four-year low ( Mint , 16th November, 2013) and UPA is still groping in the dark to figure out how to handle inflation , deficits and govern this nation
To me , the fate of truck operators & tractors companies and not the sensex, is directly related to the fate of the common man & is the right indicator of the nation’s economic health. Trucks are the means for transporting goods and thereby, the correct parameter to judge the movement of economy. Truck operators are exiting truck business ( Mint, 26th November, 2013)., which is an indicator of the negative economic indicators
Sales of trucks dropped 29% in the first seven months of 2013, and truck sales have been declining for 20 months in a row according to SIAM and the existing truck operators are operating at 40 % of their capacity. Mint dated 26th Nov.
In my view, this mirrors with the growth slowdown of the economy that was once growing more than 8 % and is now growing around 4.5 % ….. High octane speeches of returning to double-digit growth are fine , but when our markets and rupee move with the news of US quantitative easing , it is good enough of the proof, that the intrinsic strength of this country’s economy is weak and of a lesser weightage than just the good news of foreign markets ( tens of thousands miles away ) or the US quantitative easing !
Small truck operators which constitute 75 % of the market are worst hit ( Mint , 26th Nov), and this must be good enough to sum up where have these Oxford, World Bank, IMF famed economists taken this country to ? May be, good rains can shower some temporary good news , but in the short-term and middle term , India has more tears to worry for than merry for this years good rains
No wonder, S&P downgraded IDBI bank debt to junk status . (Nov 26, 2013). More banks are under strain, but I believe that they would not declare NPAs before the next financial year to avoid disclosures that could add to their and the country’s woes !
Please ask the Hon’ble PM to give a statement on a scheme similar to the Food security bill launched with much fanfare in 1975 to reduce malnutrition . This scheme was called the Integrated Child Development Scheme (ICDS) . It has been around for the past 38 years and now again another bill to remove malnutrition ? Despite this scheme being around for about four decades, the scenario is as mentioned below ;
It is a matter of serious concern that the mean per capita consumption of calories has never crossed the minimum threshold for intake ( 2400 Kcal in rural and 2100 Kcal in urban areas), and still about 3/4th of the households do not consumer the minimum calorific intake (Dr.D.K.Taneja, 2013, p. 21)
Protein Energy Malnutrition (PEM) most commonly prevalent in India . 45.3 percent of children under 3 years are under weight as per NFHS -3. Also, as per NFHS-3 , 33 percent of adult women and 28.1 percent of adult men have below normal BMI (Dr.D.K.Taneja, 2013, p. 301)
According to the information procured from the Ministry of Women and Child development via RTI through their letter dated 25 July 2013 ( F. No. 10-1/2011-CD.II(Pt.II)
Total money spend in 11th plan on ICDS was Rs.43829.53 Crore
Total money spent in 2012-13 is 15701.50 crore
During the 12th Five Year Plan, a total approved allocation of Rs. 1,23,580 crore has been made for the scheme. Any additional requirement of funds under ICDS Scheme can be met through Supplementary Demands for Grants and savings. ( Source http://pib.nic.in/newsite/erelease.aspx?relid=93731 )
I think food security bill means ‘another bill for the poor and dollars for the congress’ .
This bill might be another money-making scheme in the name of aam aadmi .. Already, all the FM channels have been bombarded with advertisements for the Food security bill making the intentions of congress very clear that this is a poll gimmick
Rajendra Pratap Gupta