The Brangelina Economy The good news is that the Indian economy defied structural problems to notch an 8.9 per cent growth last quarter. Almost on cue, the IMF and others have revised GDP growth projections to 8.3 per cent for the year 2006-07. This makes India the second fastest growth engine in the global economy. As corporate results boost the BSE Sensex to touch the 13,000 mark, the Reserve Bank of India and Finance Minister P. Chidambaram are worried about the "overheating" of the economy. That, though, is more a debate among the cognoscenti club of interest rate watchers. What must worry the Singh Parivar of reformers is the fact that the growth is just as wide as the interest in Brangelina-or Brad Pitt and his beau Angelina Jolie.
Simply, the fruits of this growth are limited to those on the higher levels of the Indian pyramid. This should worry them because they did come to power on the premise and promise of inclusive growth. Yes, the Sensex is surging but barely 4 per cent of the populace or four crore people participate in the capital market. Companies are posting big numbers but the organised sector accounts for barely 7 per cent of the labour force. In other words, we are staring at a question of sustainability. Can a section of the economy lift and ride the tide to the shores? In a recent paper on inclusive growth, a World Bank team finds that "the gap between the best and the worst placed is growing". It is a concern validated at home. Last month, the National Sample Survey Organisation revealed that unemployment is highest among educated youth in the age group of 15-29 and that agriculture, which accounts for barely 20 per cent of GDP, hosts 67 per cent of the rural labour force.
Jobless growth is a prescription for a socio-economic disaster. Clearly, there is a need for a mix of skills training and policy to create jobs. This could range from opening up retail to enable food processing sector to take off to making agriculture viable by freeing it from the mumbo-jumbo of policy. On paper, the UPA has time-30 months-on its side. On the ground, though, it seems to be moving towards the trap that laid the NDA low. India Shining, too, was after all, a description of the Brangelina economy.