This is my take on what is actually wrong with Indian Economy, mimicking the article published by Mint Magazine. This is condensed version of my previous article 'India is not producing enough'.
Here is the original print from Mint Magazine.
Sunday, September 22, 2013
3 comments:
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Sujai, my take on the matter:
ReplyDeleteIndian economy today is highly polarized. On one hand, we have agriculture employing the bulk of our labor force. This sector's contribution to the economy is far below the employment ratio.
On the other side, the services sector employs a much smaller section of labor but dominates both GDP & GNP.
Individuals employed in agriculture find it difficult move to the services sector due to high entry barriers. Even if they manage to do so, they can only be peripheral players with paltry wages. They are thus condemned to continue a life of bare subsistence.
We need to invest in increasing the profitability of agriculture. This requires land reforms, crop & water management etc.
The surplus labor thus released from agriculture needs to be diverted to the manufacturing sector. Retraining is cheaper compared to the tertiary sector and returns are quicker.
The service sector needs reform too. India is too large a country to depend only on outsourcing. The labor cost advantage will vanish soon. There is a need to reduce dependence on outsourcing & speculative sectors like real estate. Tourism, culture etc. are much better options (retraining again is cheaper).
Capitalism, Congress -- the two main ills of India. God save!
ReplyDeleteConsumption driven society has no end point. It will push all of us in a circular rat race till our earth is destroyed.
Coal, Oil are not meant to be burnt by us. They are supposed to be buried inside the good old earth. Are we doing any damn thing to make sure our balance sheet looks healthy? Middle east is not going to do it for us. US is not going to do it for us. We ought to do it ourselves.
Absolutely Perfect.
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