A Big Boost To The Government

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The Fact File

20 August 2012

A Big Boost To The Government

The UPA government, finally, has some reason to cheer. It seems to have pulled off a pleasant surprise by delivering on its promise of greater inclusive growth. The best evidence of the greater inclusive growth comes from the numbers on consumption provided by the National Sample Survey (NSS) for 2011-12, released late last week.

The NSS numbers show that the spending of the rural population has picked up at a much faster pace than that of the urban segment over the last two years. This is striking in its reversal of the trend of decades.

But what is more important is that the improvements in the fortunes of the rural economy is not just because of the growing subsidy doles, like the fertilizer subsidies and spending on employment creation, or social welfare schemes. It is mainly because of the improvements in investments and productivity in the rural economy and especially in agriculture. And this substantial improvement in productivity of agriculture investments was accompanied by an even more significant development, namely the sharp fall in the number of people employed in agriculture by as much as 157 lakh from 259 million.

Thus the sharp boost to rural consumption, highlighted in the NSS for 2011-12, is no freak accident but a validation of the success of the rural development program implemented by the UPA government.

So it is to the government’s credit that the rural poor have gained substantially in recent years. But this is a record that it will find hard to sustain in the current year with large parts of the rural economy already damaged by a severe drought.

(An extract of an article published in TOI dated 7 August 2012

by Pyaralal  Raghavan)