Globalisation is about connectivity. India still has hundreds of millions of poor people

SWAMINATHAN S ANKLESARIA AIYAR The Economic Times WEDNESDAY, DECEMBER 20, 2006

For many decades, politicians monopolised all economic power in the holy name of socialism and used this to line their pockets and create patronage networks. They shackled every nook and corner of the economy, stopping Indians from using their great energies. Those energies were released when the shackles were lifted in the 1990s. But while industry and trade have been reformed, rural India has not. Hence the vast majority of villagers polled say they are unaware of any change in economic policy whatsoever. The government has spent huge sums on rural development without getting functioning schools, health clinics, pucca roads, telecom and electricity to every village. Dalits and tribals have been given job quotas, the odd ministership and a plethora of subsidies. But they have not been empowered through access to education, telecom electricity and pucca roads. Most subsidies go to the non-poor, and those earmarked for the poor are mostly creamed off by politicians and petty bureaucrats.

Anti-globalisers say that globalisation has bypassed the poor, especially in rural India. Yes, but who is to blame? Globalisation is about connectivity, about connecting every villager to the globe. But thousands of Indian villages do not have connectivity even to the next village by pucca road. They cannot use the internet because monopoly government providers have failed, after 50 years, to get electricity or telecom to them...The government was the hurdle, not the solution to poverty. India still has hundreds of millions of poor people. But the poverty ratio has declined from 56% in 1973 to 28% today. During the heights of Nehruvian and Indira Gandhi socialism, the poverty ratio did not fall at all. Indira Gandhi’s Garibi Hatao policies abolished amiri (or at least white-money amiri) but did not reduce garibi at all.

Poverty started falling from the 1980s onwards when the green revolution raised rural incomes and the first economic reforms accelerated GDP growth. Poverty is still too high, and the poor lack connectivity...Our own government has failed miserably to provide pucca roads, telecom and electricity. Its schools and health clinics suffer from massive absenteeism, and it is too afraid of trade unions to penalise or sack the guilty. International institutions and white donors have poured billions into rural programmes globally. If despite that people remain poor and unconnected, the fault lies in Third World countries that have squandered the money. India is a minor offender compared with Africa and Latin America.