India has seen impressive economic and institutional growth in recent years, but the country isn’t yet meeting its full potential. In a world that is increasingly volatile and uncertain, how can India overcome its challenges and ensure resilience into the future? In her recent work, Professor Uma Lele explores various ways that India can achieve this. More
India has been rapidly developing, and some aspects of its economy are flourishing. Its overall economic performance has climbed at a greater rate than other Asian countries, barring China and South Korea.
The country has seen significant poverty reduction, the closure of the gender gap in access to financial services, and the implementation of substantial institutional and physical infrastructure. For example, universal ID cards and public works programmes have been introduced, the population is seeing increased access to sanitation and power, and an active democracy has been established.
In terms of health and medicine, the country has an impressive, low-cost pharmaceutical industry. There is a high vaccination rate amongst children, which has greatly reduced child mortality. An increasing number of births are attended by medical professionals, meaning that the maternal death rate has also dropped by 59%. Even during COVID, the health system performed well, despite some richer countries faring poorly, such as the USA. Supply chain disruptions were overcome and at least 67% of people are fully vaccinated against the virus.
However, despite these impressive statistics, India is facing a number of challenges. While poverty and hunger has reduced, other East and Southeast Asian countries have achieved bigger reductions.
Some of India’s neighbours, such as Bangladesh, have seen more rapid growth in employment, and are more integrated in global trade. India’s growth and quality of employment is declining, and its deficit and short-term borrowing is increasing. The country also has lower rates of agricultural research, slower growth of female employment, and poorer savings and investment strategies than other Asian countries.
Declines in child mortality and child poverty have slowed. Consumption of cheap junk food, incidence of obesity, and incidence of non-communicable diseases, such as diabetes and heart disease, are on the rise. During COVID, malnutrition amongst children was worsened by the closure of school feeding programs. The country continues to face the threat of new COVID strains, climate change and vulnerability to inflation, especially on food.
India is also lagging behind other Asian countries in terms of demographic transition, which describes the progression from high birth and death rates to low birth and death rates.
Going into the future, how can India face many environmental threats, and realize the potential to reverse trends? Climate change has caused more frequent droughts and floods, lower agricultural yields, unsustainable groundwater exploitation, soil degradation and biodiversity loss. The cumulative effect of these stressors is considerable.
So, what will it take for India to achieve robust, broad-based, sustainable growth?
Professor Uma Lele says that, to meet these challenges, India needs to introduce the right mix of policies and increase the capacity of its grassroot institutions to promote grassroot development. It also needs to foster technological innovation such as genetic technologies, digitalisation, the Internet of Things, and AI, to produce more from less.
India’s trade export policies need to be less restrictive and unpredictable, fostering growth. Tariff rates were reduced in 1991, and need to change again to increase regional integration commensurate with its neighbouring countries in East and South-East Asia.
Reforms can improve market efficiency, lower transaction costs and food losses, and lower restrictions on sale, stocking, movement and exports. Investment in building efficient and sustainable supply chains should also be increased.
Professor Lele highlights the significant potential of a diversified Indian agriculture. Diversified agriculture can promote balanced diets, which are currently beyond the reach of many low- and middle-income citizens. This calls for the production of crops beyond rice and wheat, with investment in other nutritional sources.
Professor Lele also suggests that investment in state agricultural universities and research is important. New technologies and practices need to be developed and adopted to meet future demands. Next, she identifies a number of specific interventions that could bolster the agricultural sector.
India has the world’s largest bovine stock, which offers huge potential for productivity, growth and sustainability. However, these cattle are distributed across 80 million small-scale dairy farms, so efficiencies are often low. Furthermore, the milk yields of the most common breeds of Indian cows are relatively low, due to the overall low genetic merit of the national herd.
One method to tackle this is a Ration Balancing Program – a systematic method of formulating animal diets to ensure that they meet nutritional requirements in the most cost-effective manner. These types of interventions can increase productivity from 5 to 15 percent, while reducing emissions by the same amount. To support this, it would be useful to encourage small-scale dairy producers to reinforce organisations into dairy cooperative societies, which would encourage more widespread upgrading of the overall genetic merit of the national dairy herd and the use of Ration Balancing Programs.
There are further initiatives that could encourage sustainable developments in agriculture. One example is investing in precision irrigation technologies. Satellite crop monitoring systems can assess soil moisture, expected rainfall and overall crop conditions, to identify the exact quantity of irrigation required. This provides crops with the best possible conditions and also saves water. Technologies like this can help us to manage natural resources for a more efficient, sustainable, and climate-resilient food system.
Finally, Professor Lele highlights women’s role in agriculture. India’s structural transformation from agriculture to more productive sectors has been slower than in some neighbouring countries. Also, India has experienced lower levels of female labour force participation. However, recent evidence suggests that female labour force participation has been increasing. This is a result of both changes in social norms and greater job opportunities.
The Millenium Development Goals include separate targets for both gender equality and food security. However, these can go hand-in-hand and be mutually reinforcing. Promoting gender equality empowers women in agriculture, which can contribute significantly to the fight against hunger and extreme poverty. Agricultural policies need to focus on training women so that land farmed by women achieves the yields of that farmed by men. By achieving this, the number of undernourished people in the world could be reduced by up to 17%.
The world is experiencing a series of unique shocks, including the COVID-19 pandemic, the Ukrainian War and skyrocketing inflation. The consequences have been far-reaching and countries around the world have seen budget deficits, exchange rate depreciation, and the lowering of projected GDP growth rates.
It is more important than ever that India focuses on reaching its potential and building the resilience required for the future. The adoption of innovative policies and technologies in agriculture and trade are a huge part of this and can pave the way for sustainable growth and a thriving population.