Indian politics is shaped by contrast: rapid growth versus stagnation, rich versus poor, developed industry versus laggard industry. State and federal level politicians have to walk a fine line between policies that will push the economy forward and protecting the country’s poor which will, invariably, elect them into or out of office.
No single Indian government in the last few decades has won back to back elections.
Bureaucrats like Ajay Dua, the country’s Secretary of Industrial Development and Promotion have a much longer life span. They are the policy enablers who facilitate or constrain growth.
Securing half an hour with Dua is no easy task. He is directly responsible for the development of a country of 1.1 billion people so, breaking with tradition, he doesn’t offer coffee as he starts to explain why improving the country’s infrastructure and creating agriculture-related industries are at the top of his list of priorities.
"We often looked at our population as mouths to feed but now we look at our population as hands to work, hands to produce. And that’s our advantage," he in his office in a Delhi government building or bhavan. "Those hands can become skilled. Those hands have become capable of transforming a product into a finished good."
But the same economy that has re-shaped globalization is still deceptively backwards.
"Agriculture accounts for less than a quarter of GDP and employs, under-employs 650 million people," Dua told CHINA ECONOMIC REVIEW. "The number of people dependent on agriculture must fall. We need to divert people from agriculture into industries, to services. And, if we have to divert people from agriculture, the share of manufacturing in GDP must increase. Only 3% of our food is processed. We waste about 30% of our fresh food and vegetables due to (a lack of) post-harvest infrastructure.
"Already, 52% of our GDP is services yet we are not a developed country. The organized sector of our economy employs 10% of our workforce, 90% is still either in the farm or in the informal sector."
India’s biggest comparative advantage is its population. According to Global Demographics, by 2015, 32% of China’s population will be aged 50 or more compared to 16% in India. Today, 34% of China’s population falls in the productive bracket of 30-49 compared to only 25% in India. By 2015, the numbers will be 33% and 27%, moving in India’s favor. By 2015, only 35% of China’s population will be under 29 compared to 58% in India.
"The biggest challenge before us is that those hands remain employable," said Dua. "Basic education is extremely important. Even today only 70% of our people have the basic education.
"[But] we need basic education to be backed up with vocational training. High school education combined with the ability to work. (This) means contemporizing the skills. The skills of yesterday are no longer important today."
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