Bangalore: Prime Minister Manmohan Singh warned Friday against complacency over India’s booming economy, saying the dividends of growth are yet to trickle down to the rural poor and farmers are in crisis.
Singh, whose party came to power in 2004 on the promise of improving rural lives, is presiding over an economy growing at around 9%, the fastest after China.
The investment and savings rate is as high as 35% of national economic output, Singh said at a meeting of his Congress party in this southern Indian city, the hub of a $50-billion IT industry at the vanguard of the country’s economic resurgence.
“But we cannot be complacent till the growth becomes inclusive and socio-economic development benefits more than half the population, especially in rural areas,” Singh said.
India’s rain-dependent agriculture, which contributes about a fifth of economic output but is a direct or indirect source of livelihood for two-thirds of its billion-plus population, is growing at less than a quarter the pace of the overall economy.
Annual per capita foodgrain production fell from 207 kg (455 pounds) in 1995 to 186 kg last year. The agricultural growth rate fell from 5% in the mid-1980s to less than 2% in the past five years.
India, the world’s second-largest wheat producer, exported no wheat last year after shortages forced it to import the commodity for the first time in six years.
Despite the Indian economy growing at a sizzling pace, thousands of debt-ridden farmers have committed suicide after crop failures.
“Agriculture in many parts of the country is in a state of crisis,” said Singh, an economist who in 1991 introduced reforms that ended four decades of socialist-style insulation by opening the doors to foreign investors.
“The fact that farmers are compelled to resort to suicides is a matter of deep concern for all,” he said.
In May, Singh announced a $6-billion package to try and help poor farmers.
The funds for investment in technology and infrastructure to bring crops to market more efficiently will be made available to India’s 29 states over a four-year period.
Social activists say the suicide rate among poor farmers in six of India’s 29 states has hit a 10-year high despite a Rs37.5-billion ($835-million) relief package unveiled by Singh last year.
On Friday, the premier pledged to improve living standards in the countryside by building state-of-the art power plants, roads, telecommunications, housing, healthcare and education facilities.