GROWTH SCENARIO: IS THE COMMON MAN IN THE PICTURE?

Arun Kumar

The Economic Survey notes the growth performance of the Indian economy during 200304 and 200405 indicates a possible ratcheting up of the trend rate of growth of the economy from around 6 per cent to about 7 per cent per year. Developments in the current year provide supportive evidence. (GOI 2005b: 14). A graph is produced alongside (GOI 2005b: 15) which is used as supportive evidence. How far is this a valid claim? The recent rise in the saving investment rate is seen as a cause of optimism for achieving higher growth rates. Growth at any cost has become acceptable to many under the influence of conservative economists who believe that nothing much can be or should be done about distribution. They express faith in the trickle down effect. Government economists also express faith in this view. Such arguments are based on a mechanical view of man as a sophisticated machine devoid of social linkages and consequences. The government need not worry about him as he will take care of himself. Further, the public has got used to tall claims from the government, like the India Shining Campaign of the previous government, even while it finds its lot deteriorating. It needs to be asked, how far has this growth benefited the poor and the common person in the country? The continuing problems of the farmers, of the youth looking for employment and those in the unorganised sectors suggest that all is not well. THE POSITIVE FEATURES OF THE ECONOMY IN 200405 The Economic Survey 200405 argues that the economy performed well (expected growth rate of 6.9 per cent) in spite of the drought experienced last year. The Index of Agricultural Production is expected to show a marginal decline over 200304 (179.2 as compared to 180.1). However, data on rabi crops indicates that the fall may be greater than this. The index of wholesale prices is expected to grow by 5.0 per cent instead of the 4.6 per cent growth last year in spite of the drought and the rise in petroleum goods prices which has had its impact on internal prices. Rate of industrial growth has continued to rise to reach 7.8 per cent while the services sector grew at 8.9 per cent. India, therefore, presents the image of one of the fastest growing economies in the world with moderate rates of inflation. This picture looks even better when the fact of higher savings and investment rates is factored into the analysis. The investment (Figure 1) and savings rates declined after 199900 and started to pick up in 200203 and have gone up to reach a new high last year. This suggests that with a constant capital output ratio, the rate of growth can pick up.

Growth at any cost has become acceptable to manywho believe that nothing much can be or should be done about distribution. 41

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Alternative Economic Survey, India 200405: Disequalising Growth

FIGURE 1 Gross Domestic Capital Formation at Current prices 198081 to 200304

30 25 20 GDCF 15 10 5 0 1 3 5 7 9 11 13 15 17 19 21 23 Years since 1980-81

Note: Gross Domestic Capital formation corresponds to Investment. Source: Economic Survey 200405

On the external front, exports have continued to rise strongly (25.6 per cent in $ terms) and the foreign exchange reserves rose by a further 22.7 per cent in $ terms to reach the record figure of $128.9 billion on 4 February 2005. This covers 16 months of imports and places the economy in a more stable situation than earlier. These resources provide the base for a faster expansion of the economy without the worry of higher inflation. The other critical resource for a faster expansion of the economy is the availability of food. The stocks have declined sharply in the last three years but they remain at a comfortable level and no shortage of food is anticipated. In other words, neither foreign exchange nor food would be a constraint to the faster growth of the economy. While infrastructure could be a constraint to faster growth, the government has been claiming that the economy has transited to a higher growth path. How far is this correct?

neither foreign exchange nor food would be a constraint to the faster growth of the economy. The decadal average growth rate shows that the averages for the 1980s and 1990s are certainly higher than those for the 1960s and 1970s. However, they are not very different from each other.

HIGHER GROWTH PATH OR A DOWNTURN? The Economic Survey presents a graph (GOI 2005b: 15) that gives the rate of growth of a year as the average in the preceding 10 years. Figure 2 presents this along with the actual annual growth rate and the decadal average growth rate for comparison. The graph of the past averages shows that the growth rates have been rising since 198081. However, this graph can be read in different ways. There is no dispute amongst analysts that the growth rate went up in the 1980s as compared to the 1970s. The decadal average growth rate shows that the averages for the 1980s and 1990s are certainly higher than those for the 1960s and 1970s. However, they are not very different from each other. So where does the argument for the higher growth rate come from? Even the graph in the Economic Survey suggests that there has been a stagnant rate of growth in the last 10 years. Further, it displays a cyclical pattern and one cannot project from that to argue that the rate of growth will now rise. Finally, it distorts the pattern of actual growth so it is not a good way to show that there would be a higher growth in the future. For instance, in 199091 there was a sharp downturn but the graph shows an upturn. In fact, why take the average for the last 10 years

Growth Scenario
FIGURE 2 Growth of NNP at Constant Prices

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12 10 8 6 Rate of Growth 4 2 0 -2 -4 -6 -8 2001-02P 1950-51 1953-54 1956-57 1959-60 1962-63 1965-66 1968-69 1971-72 1974-75 1977-78 1980-81 1983-84 1986-87 1989-90 1992-93 1995-96 20021998-99

Year Past ten yr av

Source: Economic Survey 200405

Decadal Av

Actual

FIGURE 3 Growth in National Income at Constant Prices

8 7 Rate of Growth 6 5 4 3 2 1 0 1950-51 1954-55 1958-59 1962-63 1966-67 1970-71 1974-75 1978-79 1982-83 1986-87 1990-91 1994-95 1998-99

Year Past ten yr av

Source: Economic Survey 200405

Past five yr av

and not 5 years or some other number of years? Figure 3 presents for comparison the past 5 and past 10 year averages. The five-year graph shows more fluctuation as expected and shows that the trend has been falling in the recent past. From that can one conclude that now the rate of growth of the economy will fall, contrary to the expectation in the Economic Survey? One needs to interpret the kind of graph that is presented in the Economic Survey more carefully.

The five-year graph shows more fluctuation as expected and shows that the trend has been falling in the recent past. From that can one conclude that now the rate of growth of the economy will fall, contrary to the expectation in the Economic Survey?

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Alternative Economic Survey, India 200405: Disequalising Growth

If an economy is on a steady rate of growth at r%, the past ten year average income bears the following relationship: (Yt)av Yt10. If Y displays a cyclical pattern with a periodicity of 10 years (or a sub-multiple), the fluctuation would be eliminated. In other words, the graph crudely represents the past and that is hardly the basis to project if there is a new growth path based on some parametric changes in the economy. Further, if the authors of the Economic Survey wish to claim that this graph is useful then they must also accept that according to them the economic up turn started 25 years back when the old policies were in operation. Then where was the need for the New Economic Policies (NEPs) with all their iniquitous consequences? Are they trying to make a case that if equity is a concern there was no need for the New Policies launched in 1991? The 10-year average graph also shows that while the peaks are narrow the troughs are wide. This is the classic pattern of business cycles. What this suggests is that the rate of growth after reaching a peak in 200304 is now on its way down. The New Economic Policies by limiting the role of the government in the economy prevent the government from implementing anti-cyclical policies to give a boost to the economy (Kumar 1996). The cyclical pattern is also a consequence of the narrowness of the base of the growth impulses of the economy (discussed below) and the rise in the size of the black economy that accentuates the tendency for deficiency of demand in the economy (Kumar 1999). THE WEAKNESSES: THE POSITIVE HIDES THE IMPLICATIONS FOR THE POOR Since 1991, governments have been using the Economic Survey to paint their policies in a positive light. They, therefore, tend to gloss over the negative aspects of their actions. Much of the national media, controlled by the corporate sector, also plays a supporting role. For instance, in the post budget discussion, the views of the corporate world are given predominance even though they produce a tiny fraction of the GDP. The media has been a party to spreading the feel good factor. It has put out stories of Indian students getting high starting salaries abroad (up to a crore per annum) and by Indian standards high salaries in India itself. What is not pointed out in these stories is that they are only talking of a few thousand lucky young people. A bulk of the 9 million young Indians who join the workforce annually struggle to get jobs and often will get salaries of just a few thousand rupees per month. The fact that the economy will grow at around 6.5 per cent while agriculture witnessed a drought itself is an indication of the growing divide between the few and the many. While close to 60 per cent of the population dependent on agriculture, will witness a declining per capita income, the rest of the economy employing 40 per cent of the workforce, will experience a growth rate of 9 per cent. This picture is not undifferentiated and needs refinement. The share of the unorganised sectors in the national income has dropped from 64.3 per cent in 199192 to 58.5 per cent in 200102 (Kumar 2005). However, employment in this sector is rising as a fraction of the workforce. The organised sector employs 5 per cent of the workforce (counting child labour also) but produces about 41.5 per cent of the output. Thus the ratio of the per worker output in the organised sector compared to that in the unorganised sector would be 13.5. Since 65 per cent of all investment is going into the organised sector, the

if theeconomic upturn started 25 years back when the old policies were in operation. Then where was the need for the New Economic Policies (NEPs) with all their iniquitous consequences? the rate of growth after reaching a peak in 200304 is now on its way down. The cyclical pattern is also a consequence of the narrowness of the base of the growth impulses of the economy and the rise in the size of the black economy

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45

organised sector worker is getting 35 times more capital than a worker in the unorganised sector. This underlies the wage differential between the two sectors. Consequently, those in the organised sector of the economy (5 per cent of the workforce) will experience rising incomes but not those in the unorganised nonagricultural sectors (35 per cent of the workforce) whose share in output is falling while their share in employment is rising (Kumar 2005). Further, those in the fast growing sectors of ICE, software and BPO are a minuscule fraction of the organised sector workforce and will experience even higher growth in incomes. In brief, around 3 per cent of the households (in the organised sector and self employed) will see their average incomes rise, about 60 per cent in agriculture will see average incomes fall and the rest will have stagnant or marginally rising average incomes. Further, since most of the private investment is going into the already developed areas and the government is cutting back capital and developmental expenditures, the backward areas are languishing and this is resulting in a growing differentiation between the advanced and the backward regions. In sum, growth is leading to rising inequity which would explain the continuing distress of the farming community as reflected in the unabated suicides, the distress of the youth which is unable to find proper work, the marginalisation of the unorganised sector and the backward areas of the country. The government has delayed the passage of the Employment Guarantee Bill. Even though it is only a safety net device and in itself is inadequate to take care of the problem it is necessary to at least meet the urgent needs of the really poor in society. Further, there is no overall appreciation of the causes of the problem amongst the policy makers and of the fact that a comprehensive view of the problem is necessary to boost employment generation in the country. What they do not realise is that they need to look at each of their actions to see which ones are reducing employment generation. The following makes this clear: 1. The government, in spite of a build up of foreign exchange reserves that are proving to be an embarrassment is continuing to welcome FDI in areas which have been traditionally labour intensive like retail and construction. These moves will cause a further decline in employment elasticity. This reflects a mindset in which the poor do not count and only the needs of the elite are important. The question is why should India not be protecting employment when the employment situation is reaching crisis proportions? The capital needed in the sectors that are being opened up is available within the economy. After all, total approval of FDI in 2003 was about Rs. 5,500 crore, a mere 0.9 per cent of all investment in the economy. Even though it is small, it is also forcing the Indian industry to upgrade and use more capital intensive industry. The net effect of new technology (even though it creates some jobs) is lower employment in the organised sector and also elsewhere. Use of new technologies like telecom or computers in the older industries is reducing employment in traditional industries. 2. To appease industry, especially foreign capital, the government has been trying to push through labour reforms on the plea that flexible labour markets will result in more employment. All that this is resulting in is that employment is declining in the organised sectors which are using VRS, etc., to reduce their workforce. If the governments argument was correct, then why is employment generation not dynamic in agriculture where employment

around 3 per cent of the households (in the organised sector and self employed) will see their average incomes rise, about 60 per cent in agriculture will see average incomes fall and the rest will have stagnant or marginally rising average incomes. there is no overall appreciation of the causes of the problem amongst the policy makers and of the fact that a comprehensive view of the problem is necessary to boost employment generation in the country. The government, in spite of a build up of foreign exchange reserves, is continuing to welcome FDI in areas which have been traditionally labour intensive like retail and construction.

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Alternative Economic Survey, India 200405: Disequalising Growth

elasticity is now close to zero whereas there is full freedom to hire and fire since it is entirely in the unorganised sector? 3. Reduction in customs duties since 1991 is undermining not only the largescale sector but more importantly the small-scale sector and this is effecting employment generation in the country. In 1991, the customs duties were of the order of 4 per cent of GDP and now they are down to 1.7 per cent. In 1991, they were roughly equal to excise duties but now they are around 40 per cent of excise duties. Since internal indirect taxes feed from one good to the other, they raise prices which effect even the small-scale sector which is otherwise mostly outside the net of such taxes. Further, the benefit of cheap imports goes mostly to the large and medium sectors which are more import intensive than to the small-scale sectors. Cheap imports effectively mean dereservation for the small-scale sector. In brief, the small-scale sector suffers both due to internal and external competition. 4. The stagnant employment generation is also linked to the narrowness of the growth. It is dependent on the well off sections (say, 3 per cent as pointed out above). The demand from this upper crust is for imported and/or high technology goods. These have low employment elasticity. 5. Agriculture is not only starved of investment but whatever it is getting is mostly labour displacing and that is why it is generating little work. Opening up and building up of stocks has led to stagnant or declining prices while the new investment has raised costs due to the adoption of new technology. This underlies the crisis in agriculture which is resulting in low investment and little employment generation. 6. The higher budget deficit of the government and cut back in social sector expenditures is accentuating the hardship of poverty (see Kumar, Chattopadhyay and Dharam on Fiscal Policy in this volume). Public health and education which have a huge potential for employment are in a state of near collapse. Commercialisation in the social sectors (health, education, drinking water, etc.) is on the rise creating two marketsone for the elite and the other for the restand creating problems for the common man who does not have the wherewithal to pay the higher costs for these basics of life. It is leading to a collapse of public education which is effecting research and making it more narrowly focused on courses with commercial value. The focus on learning is changing to that on passing exams. This has the potential of locking the country in a low value added and low productivity production using cheap labour. The country is becoming a part of the global division of labour. The poor with low levels of skills are the residual in the process. The backward parts of the country are also at the tail end of this process. In brief, commercialisation in education will accentuate differentiation. Growth has been based on the consumerism of the well off and has overlooked normal welfare decreasing consequences like displacement, polluting production and growing malpractices in social sectors. In other words, growth is associated with a decreased amount of welfare of the common person. Drinking water, air and food are all polluted resulting in a decline in health and increased medical costs. The growing malpractice in the health sector is adding further to the costs. The growth in the services sector because of these rising costs is in part spurious.

If the argument was correct, then why is employment generation not dynamic in agriculture where employment elasticity is now close to zero Cheap imports effectively mean de-reservation for the small-scale sector. In brief, the small-scale sector suffers both due to internal and external competition. Agriculture is not only starved of investment but whatever it is getting is mostly labour displacing Public health and education which have a huge potential for employment are in a state of near collapse. The focus on learning is changing to that on passing exams. This has the potential of locking the country in a low value added and low productivity production using cheap labour.

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47

There are two consequences of this. First, there is a need to redefine poverty and second, economic growth rates need to be reassessed to bring them more in line with an increase in the true welfare of the people. Environmental damage and loss of assets due to displacement also need to be deducted to calculate the actual rate of growth of the economy. In brief, the current data does not adequately represent the growth rate of the economy and does not measure the welfare implications for the poor. NARROWNESS OF THE GROWTH IMPULSES Growth since 199091 has been accompanied by growth in share of output of the a) organised sector, b) services sector, and c) more developed regions and a fall in the share of employment in the organised sector, and expenditure of government on development, especially in social sectors like health and education. So, fewer people are producing more and earning more, the poor who need more government support are getting less of it, and poverty is getting concentrated in agriculture and in rural areas of the backward regions. Thus the base of growth of the Indian economy is becoming more and more narrow. If child labour and women who are at home and want work are also counted then the unorganised sector is 95 per cent of the workforce and the un- and under-employment rates higher than what the official data reveal (Kumar 2005). Since their incomes are rising slowly or are stagnant, mass demand too is rising slowly. The elite whose incomes have risen fast, accentuating disparities, can sustain high growth in demand only for a short period of time. This results in demand deficiency manifesting itself repeatedly. Prior to 199091, while the downturn was associated with a downturn in agriculture now that is also modified by the business cycle in non-agricultural sectors due to demand factors. The reduced role of the government lowers its capacity to boost demand when there is a downturn. The economy has to revive on its own through increases in private investments but since these are flowing into the more developed parts, the poorer areas are becoming more marginal and more dependent on the government which is in retreat. Growth is also narrowly based in the urban areas and in the more developed areas. Given that poverty is entrenched in the rural areas in the backward States, the higher growth does not benefit the poor. The divide is only likely to grow with this narrowly based growth. The dilution of the role of government has also affected the backward States more than the others. The growth in black economy leads to an increase in disparity, reduces the effectiveness of expenditures by the government and leads to failure of policy (Kumar 1999). As the Finance Minister said in his budget, expenditures do not mean outcomes. All this reinforces the cyclical factors. Underlying the post-1991 policies and the growth path is a philosophical viewa faith in the efficiency of markets. Markets marginalise man (Kumar 2005). They cater to the purchasing power of the individual and not to his/her needs and wants. Markets are based on a mechanical view of manthat of a sophisticated machine which can be switched off or on at will with no social consequences. People are seen as demand or suppliers of factors. Nothing else matters. Everything else is put under ceteris paribus as of little consequence. This view underlies the present policies. So unemployment is not important but the stock market is. Faith in the markets is also an expression of distrust of people and their ability to contribute to society for non-monetary reasons. For instance,

there is a need to redefine poverty, and economic growth rates need to be reassessed to bring them more in line with an increase in the true welfare of the people. the base of growth of the Indian economy is becoming more and more narrow. Given that poverty is entrenched in the rural areas in the backward States, the higher growth rate does not benefit the poor. Faith in the markets is also an expression of distrust of people and their ability to contribute to society for non-monetary reasons.

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Alternative Economic Survey, India 200405: Disequalising Growth

privatisation implies that the public sector cannot be run on a spirit of public purpose while the same institution can be run on profit motive. For example, take the privatisation of services in the Railways. The same people will not do a task for the railways but do it if they can earn a profit by doing it. The task is the same and the person may also be the same but the argument is that the work would only be done for a profit. Markets cater to the greed of man and promote it and then its proponents argue that man only works for a monetary incentive. Health and education have traditionally been considered to be priceless for a good reason. More than monetary reward is associated with them. Teachers and doctors were given a high status and they were expected to show the way to society and to individuals. Sacrifice was involved in it. Today, markets consider sacrifice to be foolish. In these fields, there is a move to charge what the market will bear. Commercialisation is forcing the valuation of these services and they are becoming a source of high profit. Public education and the health system which are still cheap have been devalued by society and the private sector is emerging rapidly making legitimate and illegitimate profit. Society is inevitably taking a narrow view of these services. However, these services can only be valued if a narrow and mechanical view is taken about them and they are treated as other normal goods. This contradicts the very idea underlying themof treating man as a being. If we squeeze the patient and the student dry because the market will pay the price, what will they do tomorrow? If these services are treated as non-market and as builders of society, distinct from other goods and services, there would be a profound impact on policy. This underlying view is also undemocratic since people do not count. It divides people and hands over the reins of control to those who control capital. Leaders are not leaders of men but of capitalthose who operate on behalf of capital and do not believe in the finer aspects of human existence. This is the distinction between todays leaders and those of an earlier generation. Market as an ideology has become so dominant that even the common man is subject to its control and is unable to resist it because of lack of alternative visions. These alternate visions need to be created but little is being done in that direction. This, in spite of the hardships that the common man has to undergo not only in poor countries like India but also in the more advanced countries. In India, it is clear that since NEP were launched, through each cycle and there have been three of them, the common man is getting more marginalised. The economic processes are complex and most do not understand the direction they are likely to take. This atomises them and they only act in a limited framework leaving the bigger picture to capital. The media is not helping in understanding the big picture. Leaders are untrustworthy since they have repeatedly failed so who do you look up to except film actors and cricketers who anyway push for the corporate sector through their lifestyle and advertising? SAVINGS AND INVESTMENT The growing disparity pointed to above, underlies the rise in the savings propensity. As incomes get concentrated in the hands of a few, in spite of more consumption of luxury goods, since these people have a higher savings propensity, the overall savings propensity rises. This argument can also be understood in terms of the rise in the share of the services sector and the decline of the agricultural sector in the national income. The former has higher per capita incomes than the latter so the savings propensity is higher.

If we squeeze the patient and the student dry because the market will pay the price, what will they do tomorrow? Leaders are not leaders of men but of capitalthose who operate on behalf of capital and do not believe in the finer aspects of human existence. since NEP were launchedthe common man is getting more marginalised. The growing disparity pointed to above, underlies the rise in the savings propensity.

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However, it may be argued that the rise in the share of the savings propensity has taken place through the 1990s so why was this phenomenon not visible earlier? The reason is that the growing black economy masks the rise through siphoning out of the savings from the economy through flight of capital. The measured savings propensity is not the true value. In the last few years, there is evidence of a return of capital that had earlier gone out. This is one cause of the rapid build up of reserves. As flight of capital has slowed down, the savings propensity is rising to its true value. Thus, the rise is partially statistical and will not have any real effect. Data on the rate of investments shows that it has also risen but not as much as the savings propensity. After a long time, the savings propensity is now higher than the investment rate. Figure 1 presents data on GDCF and it indicates that investment increased more or less secularly till 1991 (to peak at 26.3 per cent) but after that there has been a cyclical pattern with peaks in 199596 at 26.9 per cent and again in 199900 at 25.3 per cent and now in 200304 at 26.3 per cent. Interestingly, the figure is now just what it was in 199091. Hence there is little scope for claiming that the economy has now transited to a new growth path of around 8 per cent. Further, the savings-investment gap that has opened up will actually dampen demand and act to reduce the rate of growth. Public sector disinvestment could also be playing a part in the return of capital. Assets are being sold cheap by the government and the private sector is trying to take advantage of it and bringing back a part of its capital stashed abroad. There is also the capital that is trying to take advantage of the higher interest rates available in India and the possibility of the strengthening of the rupee vis--vis the dollar. Some may argue that public sector assets are not going cheap but at market valuation. The Reliance case points to the difficulty of valuation of a company and its assets. The two Ambani brothers have tried all means available and have not been able to agree to a price. The problem is even more complex in the case of the public sector because it was not run to make a profit so current profits cannot be a criterion for valuation. When the private sector takes over a unit, it does not fulfil any of the earlier social obligations so that immediately it reduces costs and cuts losses and increases profits. Thus, valuation has to be on potential profitability. The recent adverse comments by CAG on disinvestment are a pointer in that direction. CONCLUSION Accelerating growth is necessary but not sufficient for reaching out to the poor in the economy (GOI 2005b: 18).Yet, the entire strategy of the government is to go in for more market based changes in economic policies which will mean that the poor will remain marginal. The chapter shows that growth is narrowly based in a small elite in the organised sectors of the economy. Consequently, and past experience bears this out, the economy is now ready for a downturn after a cyclical high. The graph produced in the Economic Survey (GOI 2005b: 15) that the economy has been accelerating for the last 25 years is hardly useful since it is sensitive to the number of years chosen and using a five year average one may come to the opposite conclusion than presented in the Survey. Further, even if it is taken at face value, it is not only not useful to project for the future since if new factors are at play one cannot use it to make projections but also because it shows:

there is evidence of a return of capitalAs flight of capital has slowed down, the savings propensity is rising to its true value. the savingsinvestment gap that has opened up will actually dampen demand and act to reduce the rate of growth. The recent adverse comments by CAG on disinvestment are a pointer in that direction.

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Alternative Economic Survey, India 200405: Disequalising Growth

a) that there is a stagnation of growth rates, and b) if one can accept that growth has been on the upswing for 25 years, then there is no need for the iniquitous growth propelled by the New Economic Policies. One could have continued with the old policies and had growth with less inequity. This chapter argues that the current growth in the economy is narrowly based and because of the reduced role played by the government in the economy, the economy is witnessing business cycles. This along with the return flow of capital is the cause of the rising savings rate. It is statistical and the excess of savings over investment is likely to lead to a downturn. These cycles are coupled with shocks from agriculture so that there is a complex pattern of rates of growth which is not in the control of policy makers. This is resulting in distress for large sections of the populationfarmers, young seeking employment, the small-scale sector, those in the unorganised sectors of the economy and those in the backward areas of the country. Growth is not only not generating adequate employment, the welfare associated with it is declining so we need to reassess the growth rate itself. Through the cycles the poor suffer the most. They are at the edge of survival and each downturn affects them adversely and cumulatively this erodes their condition. The decreased intervention by the government is resulting in lower expenditures on social sectors at a time when the common person needs more of it rather than less. The state of collapse of public education and public health has long-run consequences for the country as a whole. The nation is becoming a part of an international division of labour in which it is getting more marginalised and the poor suffer its worst consequences. REFERENCES
Government of India. National Accounts Statistics, Central Statistical Organisation, Various issues. Government of India. 2005. Union Budget 200506. Government of India. 2005b. Economic Survey 200405. New Delhi: Ministry of Finance, Economic Division. Kumar, A.1996. New Economic Policies, Instability and Policy Ineffectiveness. Economic and Political Weekly. November 23: 306170. 1999. The Black Economy in India. New Delhi: Penguin. 2005. Factors Underlying Jobless Growth in India and the Need for a New Development Paradigm, Bhartiya Samajik Chintan. January-March. III(4): 21529.

The state of collapse of public education and public health has long-run consequences for the country as a whole. The nation is becoming a part of an international division of labour in which it is getting more marginalised and the poor suffer its worst consequences.