Poor states are no longer clustered at the

bottom of the growth

In my opinion poor states are no longer clustered at the bottom of the growth
because poor states are also growing at a fastest speed. Earlier the rich states grew
at the fastest rate and the poor states like Bihar, Orissa, Jharkhand, and
Chhattisgarh were growing at a slowest rate. Now the these poor states like Bihar
is growing at 11.03%, Orissa at 8.74%, Jharkhand at 8.45%, Chhattisgarh at
7.35%.These states are growing at an international norm of 7% growth. This
increase in growth rate is because of the participation of both rich states and the
poor states towards the development of economy as a whole. During 1980s
industrial and trade policies were liberalized. Restrictions on entry of new
industries were removed and better agricultural performance resulted in increase
rural demands for manufacture goods. Investments in both private and public
sector increased during this period. The industrial growth rate moved up and was
recorded as 7.7% percent per annum. In 1991 the economic reform was marked by
slow growth rate because of the increase in the cost of the imports which led to the
fall in demand due to inflationary pressure, reduction in public expenditure and
strict fiscal policies.

After 1993-94 it was witnessed rapid growth,

surpassing pre- liberalization growth rates. In 1991 the government of India
introduced a NEW INDUSTRIAL POLICY the main aim was to reduce the
regulation of economy. This brings privatization in the economy contracting the
role of public sector. The new industrial policy announced six major reforms:-

 Policy of dereservation, i.e. reducing the number of industries reserved for

the public sector.
 Policy towards sick public sector enterprises.
 Policy for Navaratanas and Miniratanas.
 Memorandum of understanding.
 Voluntary retirement scheme.
 Disinvestment of public sector share-holding.

This policy has brought development in Indian

economy. It benefitted not only the urban sector but also the rural sector.
The employment opportunity has increased and the income of the peoples
increase, this has lead to the increase in per capita income of the country.
The rate of growth during eight and ninth five year plan (1992-2009) has
been around 6%. Developing nature of Indian economy is also reflected in
changes in the composition of national income i.e. contribution of different
sectors in national income like manufacturing, construction, electricity
supply, water supply has increased from 13% in 1950-51 to 25% 2003-04.

The service sector like trade, transport, communication,

banking, insurance, and government services has increased from 28% in
1950-51 to 51% in 2003-04. In 2009 there has been rapid rise in the sale of
motorcycle and other branded consumer goods in rural areas and also the
rise in cell phone connection has increased. The industries have a huge
opportunity in rural areas and they can best derive the benefit out of it. There
has been high rate of capital formation which leads to increase in
productivity and income. The period since 1950-51 is characterized by
continuous increase in the rate of saving and capital information. It is
increased from 8.7% of national income in 1950-51 to 26.3% in 2003-04 i.e.
increase by three times.

Poor states were also growing because of the significant

changes in the agriculture. Indian agriculture has become technology
oriented. Farmers in the poor states had become responsive to the new
technology and new policies. There has been an increasing use of farm
machinery like tractors, as a result productivity increases which leads to the
increase in income of the farmers, their saving increase which increase the
economy of the country. For example Bihar’s growth rate has increased to
11.03% and it is almost like China. This state has improved so much that it
is on top of the growth league. In September 2009 it has been seen that,
urban tele-density in Rajasthan (104.4%) and Orissa (101.59%) exceeded the
national level of 101.38%. In Bihar and Jharkhand the tele- density is still
low but there are many tele –density which is coming fast and rural states
are rising. When the country start growing faster it leads to the increase in
the government revenue. The government can utilize these rises in revenue
by spending in social sectors and welfare. The growth enabled the central
government to finance the National Rural Employment Guarantee
Programme, Bharat Nirman, Sarva Shiksha Abhiyan, to give waivers in term
of loan, and oil subsidies but these welfare activities didn’t cause any sharp
rise in the economic growth.
WIDESPREAD GROWTH CAN TAKE PLACE
ONLY WHEN IT IS ALL INCLUSIVE

Growth can take place when we take into consideration the entire sector like
agriculture, infrastructural, industrial, science and technology and educational and
health sector. India has completed over five decades of economic planning. During
this period significant and structural changes have taken place in the Indian
economy. The changes that have been brought in various sectors are:

AGRICULTURE SECTOR
From the past two decades Indian agriculture has experienced
a significant change. Subsistence farming has given place to market oriented
agriculture. Indian agriculture has become technology oriented. Farmers were and
are responsive to new technology and new policies. There has been increasing use
of farm machinery like tractors, harvesters, etc. the use of inputs such as high
yielding variety seeds, fertilizer and pesticides has increased green revolution in
case of wheat and rice, and white revolution in case of milk and milk products
have taken place in Punjab, Haryana, Maharashtra, Gujarat etc. The production of
agriculture has increased and there were no more shortage of food grain. As a
result the per capita availability of food grain has increased.

INFRASTRUCTURAL SECTOR
Infrastructure sector include power, transport, communication
and banking facilities which are essential for promoting the overall economic
development. Transport facilities have shown a improvement with the
development of extension of roads, railway tracks and rise in the production of
road vehicles, railway engine and wagons. At present over 25 % railways network
is electrified. India’s communication network has come of age with the use of
advanced and highly sophisticated technology. Similarly the finance and banking
has made an impressive expansion. The money and capital market have also grown
in strength. Thus at present our country has sound and well developed financial
system.

INDUSTRIAL SECTOR
During the planning period India has experienced the numerous
changes in the industrial sector. The main changes are under:

 India has achieved a well developed industrial base with the development of
heavy, capital goods and machinery. A variety of products like iron and
steel, engineering goods, metal and metal products etc which were imported
earlier, are within the country. Growth of these industries producing capital
goods has been very impressive indeed.
 The country has achieved of sophistication in the sector like machine,
telecommunication, and equipment electronics etc.
 Industries producing durable consumer goods have experienced a
remarkable growth. The production of refrigerator, washing-machine, air-
 conditioners, scooters, cars etc. have increased tremendously. There has
been 78 times increase in the production of automobile.
 The industrial sector has become widely diversified covering a wide range of
industries producing consumer, intermediate and capital goods.
 Changes in the industrial structure have led to changes in the export and
import structure of the Indian economy. Engineering goods, leather goods,
readymade garments, gems and jewellery, chemical products etc. have
become the important source of export earnings.

SCIENCE AND TECHNOLOGY

Indian economy has made a reasonably good progress in the
science and technology sector. It has been accepted as the major aim of planning in
the country and government has been providing special support to the development
of science and technology. A network of national laboratories, such as the Council
of scientific and Industrial Research, Indian Space Research Organization, Indian
Council of Agricultural Research etc has been set up. Public sector and private
sector has established their own research and development (R&D) laboratories to
meet their own technological requirements. India today rank second in the world in
the number of scientist and technological manpower. India has used science and
technology in developing advance techniques in agriculture, industries and
communication.

EDUCATION AND HEALTH SECTOR

India has recorded progress in the field of education. The
number of upper primary schools has increased by 17 times from 13600 in 1950-51
to 24500 in 2002-03 and the number of student has increased by 13 times during
the same periods. The number of secondary and senior secondary school has
increased by 20 times. The number of universities has also increased to a large
extent from that of time of independence.

Improvement in the health sector has also seen. The number

of doctors has increased by over 10 times from 1950-51 to 2003 04. Number of
hospitals and dispensaries has also increased to a large extent because of this there
is an improvement in the health of the people. The death rate has gone down due to
improved medical facilities.

THE PERFORMANCE OF INDIA FOR THE PAST

FIVE YEAR

For the past five years Indian economy has witnessed various ups and down. In
the previous year i.e.2009 India as well as the other nation has to face high rate of
inflation. The IMF estimated that there will be fall in the economic growth in 2009
to 0.5% advanced economy contracted by 2 percent in 2009. India was not much
affected due to the large population and the increase in per capita income for the
past few years ensure continued economic growth. The growth of the Indian
economy was impacted by the growth prospects of the world economy as the
demand for the export goods continue to fall. Indian economy growth was around
9.0% during the year 2004-07. The real GDP was modest during Jan-Dec 08 and
was registered 7.4% whereas in the previous year it was 9.2% the effect of this was
seen in the manufacturing sector due to this it has effect on the industrial sector and
the growth rate was 5.7% in 2008 where as in previous year it was 9.4%. The
decline in the growth was due to increase in price of the raw material which
includes minerals, metals, etc. The cost of production of the product was increased
and the customer has to pay the high price. The rise in burrowing cost also slowed
down the economy, the consumption expenditure was slowed down to 7.0% from
7.09% in previous year.

The service sector till 2007 was the key growth driver over the
past few years afterward it shows the moderate sign of high rates interest, global
economics slow down. The growth in service sector was 10.2% in 2008 whereas in
2007 it was 10.4%. There was further slowdown was seen in export particularly of
leather, textiles, gems and jewellery etc. India is now the fourth largest economy
in term of purchasing power parity and will take over Japan within 10 years. High
growth rate in industry and service sector provide a back drop conducive to the
Indian economy.