There is no quick fix, unlike what some of the UPA’s spin doctors may claim, to the problems at hand. India’s policy wonks just did not anticipate the pace and extent of growth that occurred in the last decade. The inability of the social and economic infrastructure to cope with the new economy is at the core of the country’s structural crisis: lack of infrastructure, skill deficit, lack of jobs, fiscal crisis and an out-of-date policy machinery.
The country’s addiction to fiscal largesse is well established, but what surprised many was that in good times no effort was made to look for a structural fix, like it did with the fuel prices once the gun was held to its head by international rating agencies. Similarly, the failure to generate jobs— the country adds one million to the workforce every month, but absorbs only 200,000 in an entire year — has been ignored.
The social circumstances are equally scary. Not only is one-third of the country’s 1.2 billion poor (with states like Bihar reporting one in two people as poor), there is growing inequality of income and opportunity, drinking water is still a dream in many areas and the education network exists more on paper than in reality. Read More