As a student of economics, I study the meaning of terms like development, GDP, growth, welfare and market equilibrium in great detail. These and many other sweet concepts keep revolving around me every time, whether I am sleep or awake. Sometimes I think, is it only me who is confused about the existence and meaning of these theories. Because if everything was far from fluctuations and uncertainties, our course would have been a straight line and not like the recessions and the depressions. And after banging my head on the walls, as to why I chose this field, I have some what managed to at least grasp one phenomenon very clearly, the difference between growth and development. For a lay man both the terms might mean same. Yet, thinking so is a crime for some one who has even just read any book on economics.
Development is a way in which the societies and economies can be seen as functioning properly. It is a holistic process. Growth, on the other hand, is an important, yet just one amongst many other aspects of development. To elaborate more, I highlight an example. The national income of any nation is the constituent of the growth, whereas the standards of living of residents of a nation show the level of development.
Economic growth does imply high levels of income in an economy which can be measured by the levels of GDP (gross domestic product). But when we talk about development, that should be inclusive of equality (including equality I all the fields of gender, race, caste), sustainability, productivity, empowerment, access to jobs, and other such phenomenon measuring the well being of the people. Thus the development programmes at a basic level should focus on the life that people lead.
We can, here, take example of our “shining” nation. The growth levels have been increased consistently, compared to the past levels, but can one comment on the development? On one hand, we have the proud owners of companies like Reliance, Tata, who earn millions in a month. And, on the other hand, there is the lower middle class like the domestic cooks, beauticians, who earn few thousands per month. Of course, different jobs require different skills and so the earnings should differ to provide an incentive to maximise labour productivity. But what one questions is equity. A person travelling in Porsche, and another one suffering to get even Rs.12 per day.
In a country where millions are spent by some on a wedding, and yet many million children of the same country are highly mal nourished. According to an article by an economist, the amount our country spends on healthcare every year is equivalent to only a seventh of the annual defence budget. And it would take $10 billion annually to halve the number of people who still have no access to clean water and sanitation, which is less than five days worth of global military spending. One symptom of such negligence is the abysmally low level of public expenditure on health, around 0.8% of GDP. Security is prime right of residents of a nation. And this also means security from structural violence, security of provision of the basic needs and equal access to the resources. Yet what we are obsessed with is the diagonal upwards trend in the GDP.
There is need for decreasing the administrative red tapism. A holistic approach towards the process of development requires means to enhance the accessibility of resource use. The public sector needs to play the role of a facilitator and not merely intervene with the market. Here, then, enters the role of market complementary state interventions where in if market don’t undertake an activity, the state intervenes to provide support. There needs to be liberalisation from the stringent bureaucratic controls. The norms of accountability need to be improved and efforts need to be made to reduce the prevailing inequalities. This isn’t a one day’s task and requires sincere handwork. As citizens what we need to do is know our rights and perform our duties. And the government, I hope they know what there real job is.
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