The Past The Indian economy lacked competition, which meant it was less innovative. This situation kept out foreign investors and knowledge, resulting in limited access to advanced machinery and equipment from the developed world. Additionally, the basic products needed to create new factories, machines, and equipment were managed inefficiently. Consequently, India adopted some of the worst aspects of both systems.
As a wise man once said, “You should never half-ass two things; whole-ass one thing!” Thus, India’s economy in the 1940s and 50s grew slowly—so slowly, in fact, that India decided to ask for foreign aid. By utilizing elements of both a Soviet and a Western economy, India maintained a good relationship with both sides of the Cold War, taking advantage of this by securing funds from both.
By the 1950s, foreign aid had become the largest source of investment in India, yet the economy continued to grow slowly. The leaders realized they were doing a poor job and concluded that the reason for the sluggish growth was the government’s lack of control over the economy. As a result, existing businesses were nationalized, and private enterprises were allowed in fewer industries. Throughout the late 50s and early 60s, the Indian government became increasingly involved in economic management.
However, relying more on a failing system did not resolve its inherent issues. The more control the government exerted, the less efficient the economy became, leading to an increased demand for foreign aid.
India was caught in a cycle: the more it took control over the economy, the less efficient it became. As it lost customers abroad, government tax revenues declined, increasing reliance on foreign aid. This, in turn, compelled India to exert even more control over the economy to manage the aid, further diminishing efficiency and leading to more lost customers.
From the outset, India faced significant challenges: a culture that did not emphasize innovation, the potential for regional divisions following the British military’s departure, a government that controlled essential aspects of economic growth, and a form of capitalism that stifled healthy competition. It became clear that the economic system in place was fundamentally broken and incapable of fostering growth.
Independence from the British ultimately resulted in dependence on the Soviet Union and the United States to sustain the economy. Meanwhile, other countries were achieving far greater success. Western Europe and Japan rapidly recovered after World War II, while South Korea, Taiwan, and Singapore experienced significant economic growth. The people in these regions were becoming wealthy at a much faster pace than India, all while thriving as capitalist nations. Clearly, government control of the economy was not an effective strategy for achieving prosperity.
The present India faces significant challenges in various sectors. Its education system is inadequate, with only 55% of 10-year-olds able to read and understand a simple story. Many people lack access to healthy meals daily, contributing to nearly half of all childhood deaths being caused by droughts. The financial system is also in poor shape; unhealthy banks, which are crucial investors in an economy, lead to fewer investments.
Foreign companies often find it difficult to do business in India, preferring to operate in countries like Bangladesh or Vietnam. Additionally, the Indian healthcare system struggles to care for its entire population.
As more developing countries implement effective economic policies in the 21st century, competition will increase. Whether India can compete with better-managed nations remains uncertain. While it is unlikely that India will become a superpower within the next decade, many believe we will eventually witness its rise as a dominant global power. By 2050, India is expected to surpass the USA in economic strength, becoming the second-largest economy in the world, right behind China.
Provided the Indian government avoids major mistakes like those of the past, this optimistic outlook appears plausible. A world with India as one of the three superpowers seems increasingly likely.
India’s government employee count is basically the opposite of that of China and the United States. Whereas in the US and China, by far most government employees work at the local level, and only some at the state or federal level. In India, it is the other way around. Most of India’s government employees work at the state and, to a lesser extent, federal level, whereas only a few work at the local level. This can explain why India’s local governments were not able to invest or help foreign investors around the rules on the same scale as their Chinese counterparts did.
But if just local capacity was the only problem, then it could simply be solved by giving the local governments more money to hire more people, right? Well, sadly, that will likely not completely fix the problem. You see, there is something really strange going on with India’s local governments despite high unemployment. Many local governments have thousands of unfilled open positions. Even worse, some of India’s poorest local governments do not even spend all the money that they get from the central government. So what else is going on?
Well, this brings us to Kapur’s second explanation of why, in this case, local governments are not living up to their potential: India’s infamous caste system, which divides people into a hierarchy of social categories based on their birth. But before getting into that, we should note that the caste system has effectively been outlawed. However, despite that, in many parts of the country, it is still very much a political reality.
The caste system can explain India’s dysfunctional local governments in three different ways. Firstly, realizing that the caste system was still strong at the local government level, India’s founders on purpose made sure that local governments were not too powerful, which can explain why this graph looks the way that it does. Secondly, even if a local government has adequate capacity, they might not have the right incentives, meaning that they may frustrate the implementation of well-meant central government policies because it is not in line with the caste system.
As an example, Professor Kapoor mentions that quite a few federal education programs where schools were built to improve the education of girls failed at the local level because, and I’m quoting, “what happens within the classroom is affected by caste and gender norms.”
The issue of governance Thirdly, in some extreme cases, the caste system even leads to government vacancies potentially being left open because they only have candidates from higher castes. For example, in their book The Narrow Order, Professor Acemoglu and Robinson describe how, in one of India’s poorer states, Bihar, the state had thousands of vacancies for engineers that were not filled despite high unemployment. Why not? Well, because those qualified to be engineers are typically from higher castes. But because the province’s reigning governor, Lalu Prasad Yadav, was from a lower caste, he refused to fill these positions.
Of course, as a consequence, everyone suffered because the government here was so severely understaffed that it could not even spend all the money it got allocated from the central government to upgrade the local infrastructure. But okay, that is an extreme case which may not be applicable to all states. However, it is applicable to the third reason why its local governments are not enabling businesses like their Chinese counterparts, and that is that India is a democracy.
Now, I want to stress that in itself, this is not a problem at all. Sure, in China, the incentives of a promotion in the party meant that local governments could override local concerns to build infrastructure and go out of their way to attract foreign firms. However, in well-functioning democracies, this does not need to be a problem, since the democratic process itself could give local governors the incentive to invest in their cities and to attract foreign firms. After all, if you as a local governor grow your economy, then you’re more likely to be reelected as local governor again.
Indeed, democracy has produced the vast majority of growth miracles, ranging from West Germany to Italy to Japan and to the United States. However, unlike these countries, Professor Kapur claims that India is a so-called precocious democracy, meaning that the country became democratic before it was perhaps ready to become democratic. Professor Kapur discusses three reasons why this is holding India’s local governments back.
The first is that a precocious democracy can get into a vicious cycle in which it delivers poor public services like schools and health care. As a consequence, wealthier people will exit the public system and start using private schools and hospitals instead. Therefore, they are now less willing to pay taxes, making local government services even more dysfunctional. Indeed, as Professor Kapur notes, local governments in India, in particular, seem to be very hesitant to raise their taxes, the taxes that they need to improve their cities.
But sadly, there’s more. The second reason why being a precocious democracy is holding India back is that, because India is so divided, local government officials that were elected by their specific caste, religious group, or any other interest group tend to prefer rewarding their voters by giving them subsidies or other specific benefits rather than investing in public services that can be enjoyed by all. Finally, in precocious democracies, politicians will tend to emphasize public goods that are highly visible and relatively easy to provide.
Live_Let_Live@lemmy.world 1 month ago
problems:
1.EDUCATION SYSTEM: The education system of India is blamed every now and then for being too theoretical but not practical and skill-based. Students study to score marks, not to gain knowledge. This so-called modern education system was introduced by the colonial masters to create servants who could serve but not lead, and we still have the same education system. Most of the person thinking present time to become employee instead of become employer.
3.CORRUPTION: The most widely spread endemic in India is corruption, which must be handled quickly and wisely. There is hardly any office, in both private and public sector, that is untouched from this disease. There is no telling how much loss has the economy suffered because of this. Though most of us are concerned, when the time comes to act, we, the people of India, are found lacking. The most widely spread endemic in India is corruption, which must be handled quickly and wisely. There is hardly any office, in both the private and public sector, that is untouched from this disease. There is no telling how much loss the economy has suffered because of this. Though most of us are concerned, when the time comes to act, we, the people of India, should not be found lacking.
4.POVERTY: A third of the world’s poor live in India, and 37% of the total population in India lives below the international poverty line. 42% of children under five years of age are underweight. Most of the poor in India live in villages. Rajasthan, Madhya Pradesh, Uttar Pradesh, Bihar, Jharkhand, Orissa, Chhattisgarh and West Bengal have the poorest areas. High level of illiteracy, lack of healthcare facilities, and limited access to resources are some of the basic problems in poor areas.
5.SAFETY OF WOMAN: The National Crime Records Bureau (NCRB) reveals that there were 3,09,546 incidents of crime against women in 2013 in India. Crimes against women have only shown an increase in the last five years. Safety is definitely one of the growing concerns in our country, particularly with regard to woman. Technology and access to it can solve many issues that women face in their day to day lives. Many startups have already taken the initiative to introduce products in the form of apps to ensure safety for women. They utilise features like GPS tracking, safe and unsafe areas on maps, ways to send alerts to emergency contacts, and scream alarms. But the main problem this thinking of the men behind it.
6.AIR,SOUND AND WATER POLLUTION: India has four of the five most polluted cities in the world. It’s not just the air – we are badly polluting our rivers and agricultural land through the excessive use of chemicals, plastic and careless disposal of waste. Pollution has the ability to reach massive proportions and destroy the ecosystem if we do not stop abusing natural resources before it is too late. Along with that, planning for the optimal utilisation of water needs to be on top of the list because water pollution and wastage can leave our country dry and barren in the next decade.
7.UNEMPLOYMENT: Unemployment is the major problem in India. This problem is not unsolvable. In India 92% people are in unorganized sector. some people are doing small works like porter, pulling a cart etc, they earn very small amount of wages. This could be solved if we youths unite and gain support of government and start some cottage and small scale industries, where people could work for their welfare. This makes Indian youths a role model to all the people in the world. So, government should give the opportunities to all the citizens by establishing factories, schools, hospitals then i thick unemployment will be reduced in India
8.CHILD LABOUR: This is the worst social evil in India. Children are exploited and are made to work in dangerous places like cracker factories. They are not treated properly. Like other social evils there are rules and laws made to stop the child exploitation but nothing has been ever properly implemented in India and hence you can still see teenagers and children working in the shops and factories.
9.ILLITERACY: The Illiteracy level is well below the world average literacy rate of 84%,and of all nations, India currently has the largest illiterate population.Despite government programs, India’s literacy rate increased only "sluggishly,"and a 1990 study estimated that it would take until 2060 for India to achieve universal literacy at then-current rate of progress.The 2011 census, however, indicated a 2001–2011 decade literacy growth of 9.2%, which is the slower than the growth seen during the previous decade.On one hand, India has a state like Kerala that boasts of 93.91% literacy in its state alone, while on the other hand there is a backward state like Bihar with 68.8% literacy rate.
The percentage of illiteracy in India is alarming. Though 74.04% of people were counted as literate in 2011 census, there is a wide disparity between rural and urban areas and male and female population. The condition in villages is worse than in cities. Though a number of primary schools have been set up in rural India, the problem persists. Many people who are counted as literate can barely read or write. Hence, providing education just to children won’t solve the problem of illiteracy, as many adults in India are also untouched by education.
10.POPULATION: Today, India’s population is 1.4 billion, and it is increasing, is the second most populous country in the world. The figures show that India represents almost 17.31% of the world’s population, which means one out of six people on this planet live in India. With the population growth rate at 1.58%, India is predicted to have more than 1.53 billion people by the end of 2030. It is a curse that hampers development and harms society. According to sources, India has about 33 births a minute; 2,000 an hour; and 48,000 a day. The availability of resources is unable to meet the increase in population. With a rapidly increasing population, the resources per person will decrease further, leading to the next two major challenges that India faces.
Education System The education system of India is blamed every now and then for being too theoretical, but not practical and skill-based. Students study to score marks, not to gain knowledge. This so-called modern education system was introduced by the colonial masters to create servants who could serve but not lead, and we still have the same education system. Rabindranath Tagore had written many articles offering suggestions to change the education system of India. But still, success is as elusive as ever.
Basic Sanitation Sanitation is yet another problem, but one of the biggest, in India. There are about 700 million people who have no access to toilets at home. Slum areas do not have toilets. People are thus forced to defecate in the open, which causes numerous diseases like diarrhea, cholera, dehydration etc. Many rural schools also have no toilets, because of which parents do not send their kids, especially girls, to school. Due attention was drawn towards this problem by Gandhiji but nothing much was done. A growing population is the biggest challenge causing these problems. For example, the sewage system in Delhi was designed to meet the needs of a population of three million people. But Delhi now has more than 14 million of population. This is not just the case of Delhi; every state and region in India is the same.
Though 12 million toilets claim to have been built under Swachh Bharat Abhiyan in the last five years, as per a UN report, 44% of the population continues to defecate in the open. Sanitation, solid waste management, and drainage continue to pose challenges in India.
However, according to Swachh Bharat Mission website a total of 100 Million toilets were built in India, and all the States, Union Territories, Gram Panchayats, and Districts declared themselves Open Defecation Free (ODF).
Healthcare System It is true that the world’s most populous democratic country cannot provide proper healthcare facilities to its entire population. India is becoming a hub for medical tourism but all these facilities are not available to local residents, who happen to be poor. Healthcare is a neglected issue in India, as major attention drawers are agriculture, infrastructure and IT. Lack of resources in rural India is a major concern of the day, leading to most of the problems. 50% of all villagers have no access to healthcare providers; Infant Mortality Rate (IMR) is 34 per 1000 live births; lack of nutrition caused stunning growth in 50% of all the babies, and 36% people in India have no access to toilets.
Despite the country’s medical tourism bringing in $2.8 billion in 2020 and being the fourth largest medical devices market, the healthcare system for the Indian citizen has been a disappointment. According to a report by NITI Aayog, the country has 1.3 hospitals bed per 1000 population with almost 50% of it concentrated in states like Karnataka, Telangana, Uttar Pradesh, Kerala, Tamil Nadu, and Maharashtra
madcaesar@lemmy.world 5 weeks ago
So everything. You could have just said everything.