DEVELOPMENT PERSPECTIVE
 

2.1.1 The objectives of fulfilling the social and human aspirations of the people, meeting the essential requirements of living, raising income levels and improving their quality of life are at the centre of our developmental efforts. While these efforts are translated into an accountable form through Five Year Plans, indications of the long-term needs of the society and the direction in which the economy should move over a longer time horizon are needed for drawing up such plans. It is this long term development perspective which is presented in this chapter.

Factors in Long-Term Growth

2.2.1 The factors which determine the long term conditions of growth are the demographic trends, the basic resource endowments, the enterpreneurial resources and the technology perspective. The growth and the structure of population and the size and growth of labour force are the elements of demographic trends which determine the long- term social needs on the one hand and influence the growth prospects on the other. Basic resource endowments i.e., the sources of energy, land, water, other essential minerals, environment and ecology are vital elements in the determination of the potential for growth and comparative advantage. However, technology can augment the basic resources by raising their productivity, and conserving their uses. Technology is, thus, emerging as the most important factor which can even change the comparative advantage. Access to the best technology in all spheres of activity and ability to take a lead in building up new technologies (i.e., making innovations) even in a small sphere of activity are going to become the most crucial factors in determining our development pace viz-a-viz other countries.

2.2.2 Some of the major concerns to be taken care of by the pattern and the pace of growth in the long run are:

i) Need for expanding employment in the face of ever- diminishing elasticity of employment to output growth, particularly in the processing and manufacturing actvities;

ii) Need for maintaining "food security";

iii) Ensuring that the vast differential between average agricultural incomes (and productivity) and nonagricultural incomes (and productivity) narrows down;

iv) Need for meeting the social needs and minimum requirements of the population within the ambits of a prudent fiscal system;

v) A realisation that in the past mere investment in quantitative terms did not necessarily mean the economic and social benefits trickling down to the poor masses leading to visible improvements in terms of standard of living and incomes for which social measures are necessary.

2.2.3 An important imperative of growth in the face of basic resource constraints is that the best of the technology is used in every economic activity and more particularly in those activities which are related to the processing of basic raw materials, manufacture and conversion of fuel into energy. This is cost-saving and also resource-saving in the ultimate analysis. However, the technology mostly comes embodied in machines, i.e., capital equipment and makes the production processes capital-intensive as well as labour-replacing. The process which economises most on the use of energy, avoids wastages of raw materials and reduce the time span of processing, also tends to involve more automation and thus saves on labour use. The higher the pace of growth we desire, the more advanced is the technology we need to adopt, and consequently the lower is the elasticity of labour absorption to growth. This trend has been observed in the development history of most of the countries. Recent experience of trends in labour absorption in manufacturing in India also conforms to this. In the perspective of the next 15 years or so, population will still be rising at a significant rate and there will be substantial additions to the labour force. While the per capita income and productivity will definitely increase, it does not follow as a matter of course

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that all those seeking jobs will get jobs. Special care will have to be taken and policies devised for making jobs available to all, which is a national goal. This would be possible by broadly following two strategies in the long run.

2.2.4 The first strategy is related to using the foreign trade, i.e., imports and exports for balancing the internal production and demands in such a way that we tilt our structure of production more in favour of employment intensive industries and exchange its products with the imported products which are less employment intensive.

2.2.5 The second strategy would be to facilitate and encourage the creation of services which are productivity-raising for the economic system as a whole. Transport, trade, and a variety of professional services are examples of such services. Services by their very nature are more labour absorbing. This has been the historical experience of many countries.

2.2.6 The development of under developed agriculture in large parts of the country will create demand for additional labour during the period in which agriculture gets transformed from a less developed to a highly developed stage. Depending on the intensity of our efforts and investments, this transformation may take anywhere around 10 years. And hence, during this period agriculture does offer additional opportunities for labour absorption. Beyond that period, agriculture may also start showing similar trends in labour absorption as the industry has shown in recent periods. In fact, at present the agriculture in North-West India is already showing such tendencies.

2.2.7 Maintaining food security and relative self- sufficiency in food production is a strategically desirable long-term goal for the country. A reasonable degree of food self-sufficiency or supply of "wage goods" is seen to have a very positive influence on stability and growth even in our limited experience of development. It may be largely due to the factor of relative food self-sufficiency, among others, that India achieved a higher rate of growth and better economic stability and resilience during the Eighties. This was the only decade as a whole when we felt somewhat comfortable on the food front. Hence, it seems appropriate that food self-sufficiency remains an important element of the strategy of development even in the perspective of a period of next fifteen years or so.

2.2.8 Food security implies not only sufficient supplies but also supplies at prices affordable by the poorer sections of the society. Appropriate institutional mechanisms, such as a public distribution system, sharply focused on the poorer sections should be put in place to protect the poor from rise in food prices. However, this task would be rendered difficult if food prices in general rise very sharply.

2.2.9 A moderate increase in food prices consistent with remuner- ative returns to the farmers should be the desired objective. In order to enable farmers to earn higher incomes a combination of processing and business activity with the farming activity is necessary. In other words, farming must be encouraged to grow into "agribusiness". In order to bring this about, efforts will be required in building the infrastructure and creating conditions for the growth of agribusiness. Innovative organisational methods and forms in which large number of small farmers could come together to take advantage of the economies of scale which are important for agro- processing and agribusiness are needed. This direction has to be kept clearly in view while evolving the pattern of long term growth. The Eighth Plan will take some major steps in this direction.

2.2.10 The existing differentials between rural and urban infrastructure facilities, the prevailing average income levels for the bottom deciles of the population and significant regional differences in development make it necessary for the State to take care of the important social needs of the population like health, education, cultural needs as well as minimum requirements of the living environment like drinking water, rural roads, information and communication. This will be over and above what the State will have to do by way of investment in the physical infrastructure like energy, transport and communication. In performing such functions in the past the Government has come under severe fiscal strains. Much of this expenditure has come out of borrowing whose cost is also increasing. There is need for maintaining the fiscal health in the long run. otherwise a point is reached when

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under heavy pressure of debt servicing the Government becomes incapable of performing even the minimum of its essential functions. Some new approaches to financing investments in the area of human development are called for. Rationalisation of the element of subsidy in the provision of these services is required. Sharp focussing on the target groups is required where the provision of services is free or heavily subsidised. Participation of private entrepreneurs, and local communities in the provision and running of institutions which take care of social needs will have to be encouraged.

2.2.11 In the past there has often been an obsession with the plan size and with acceptance of projects as plan schemes with a token outlay. This does not necessarily bring about growth in real terms. On the other hand this shifts emphasis from the real productive growth and identification and formulation of proper growth oriented schemes and their timely completion according to schedule. Many of the public sector enterprises have not only failed to generate any surplus on the massive investments made on them, but continue to demand huge budgetary support from the government every year.

Nature and Implications of Population Growth

2.3.1 The growth in Indian population gathered momentum in the last few decades. It can be seen from table 2.1 that the natural growth rate during the decade 1941-51 was only 1.25 per cent per annum, and had remained at much lower levels during the earlier decades of this century. The growth rate started increasing rather fast after 1951 and reached a peak of 2.22 percent during the decade 1971-81. It is tempting to think that if only India had succeeded in

Note:-1) The 1981 Census Population total has been revised in the light of the 1991 Census results.

2) The 1991 Census figure includes projected population of Jammu & Kashmir. 3) The Vital Rates except for 1981-91 have been calculated from the Census of India data by Reverse Survival Method. 4) Vital Rates for 1981-91 have been calculated using Sample Registration System data.

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containing her population growth rate after 1951 to around one per cent per annum i.e. the rate China has achieved, how much difference this factor alone would have meant in terms of per capita income, consumption and levels of living. The Seventh Plan document assessed the growth rate during 1981-86 as 2.1 per cent and projected the growth rate for the period 1986-91 at 1.9 per cent. According to Census 1991, the growth for the entire decade of eighties was 2.1 per cent. Thus both the Sixth and the Seventh plans have fallen short of achieving the targets set for reducing population growth.

2.3.2 On the assumption that the family planning efforts will be turned into an effective people's movement during the Eighth and the Ninth Plan, the Standing Committee of Experts on Population Projection has estimated that the annual growth rate of population during the period 1991-96 would be 1.81 per cent which will further come down to 1.65 per cent during 1996-01. The Eighth Plan (1992-97) envisages a population growth rate of 1.78 per cent per annum. As per these projections the Indian population will grow from 844 million in 1991 to 925 million in 1996, 1006 million in the year 2001 and 1102 million in 2007. (Table 2.2). The Net Reproduction Rate (NRR) will equal unity only during 2011 to 2016, that is 5 years later than was expected at the time of presenting the Seventh Plan. The goal of stabilising population (zero population growth, ZPG ) has thus shifted further in time. India's fertility and mortality levels and the age distribution of the population are such that even after attaining NRR = 1 by the year 2011-2016, the population would stabilise (i.e., achieve ZPG) only towards the end of the 21st century.

2.3.3 The socioeconomic variables that could be considered to be inter-related are death rate,

Source - Report of the Standing Committee of Experts on Population Projections (1989).

Notes 1).The projections have been adjusted in the light of the 1991 Census results, particularly in case of Urban Population.

2).For 1992-97, 2006-2011 : projections are based on similar assumptions as adopted by Standing Committee of Experts on Population Projections (1989).

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infant mortality rate, female expectation of life at birth, female literacy, female mean age at marriage and percentage of women employed. The latest available statewise data on these variables are presented in table 2.3.

2.3.4 There is considerable variation in respect of socio- demographic variables across the States. One of the most important variable, i.e, Infant Mortality Rate (IMR), for example, varies from 17 in Kerala to 123 in Orissa. Study of the relationship among demographic and socio- economic variables shows that female literacy and age at marriage are highly correlated with fertility decline. Increase in age at marriage affects fertility decline as it shortens the reproduction period and produces larger intervals between generations. Lower infant mortality rate also helps in having lesser number of children as the acceptors of family planning methods become more confident about survival of children. Fertility rates have started declining in many parts of the country where, apart from family planning programmes, substantial progress has been made towards female education and improved health status for women and children and where job opportunities for women have increased.

2.3.5 Though India was the first country to acknowledge the need for controlling population growth, our achievements have fallen considerably short of the targets in this direction. After a little initial decline during the decade of sixties and in the early seventies, the birth rate has remained stagnant at 33/34 per thousand for almost a decade till 1985. This has happened in spite of the fact that the Couple Protection Rate (CPR) has been going up significantly during the same period. The CPR increased from 22.5 per cent in 1977 to nearly 35 per cent in 1985, and further to 44.1 percent in 1991. Though the birth rate (BR) has shown a declining tendency, (from 33.7 in 1980 to 32.6 in 1986 and 29.9 in 1990) the fall is not commensurate with the increase in CPR. One explanation for this appears to be that the acceptance of family regulation methods has largely been confined to older age groups. An analysis of demographic data for 1961 and 1981, in fact, reveal. that fertility decline has been most marked in the older age group of 30-44 and much less in the age-group of 15-29. Whatever fertility decline was observed in the younger age-group was more due to rise in age at marriage than to the use of family regulation methods. However, the second half of the eighties is witnessing the beginning of a new phase of fertility decline. There has been a small but perceptible and continuous decline in fertility and population growth as indicated by the Sample Registration System (SRS) estimates.

2.3.6 Roughly 60 per cent of the total female population in the reproductive ages is below the age of 30. It is typical for all countries during their initial stage of fertility decline that the acceptors of family regulation methods tend to be in the low fertility range or in the older age group. However, after achieving a CPR of 44 and a birth rate of 30 further significant improvement in CPR can only come from acceptance of family regulation methods by the younger age- group. Further increases in CPR would then be more effective in reducing birth rates. This will require more efforts to motivate the younger people. It is in this context that reduction in infant mortality rates, increase in female literacy, and increase in job opportunities for women will become much more important variables in influencing birth rates.

2.3.7 As per the 42nd Round of the National Sample Survey (NSS) (1986-87) reports on utilisation of Family Planning Services, the percentage of eligible couples effectively protected during 1986-87 was 28.6, (Table 2.4), as against a couple protection rate of 37.5 as reported through administrative statistics. Apart from statistical discrepancy due to different sources and methods of collection of data, one reason for this discrepancy could be that the administrative statistics might have included large number of casual users of Family Regulation Methods (FRM), while NSS reveals more sustained acceptors. The NSS report further reveals higher level of effective protection in urban as compared to that in rural areas, and higher level of effective protection among the population group above poverty as compared to that among the group below poverty. This is as to be expected. But what is more revealing is that even among the rural below poverty group, effective protection rate was nearly 22.65 per cent as compared to the overall all- India rate of 28.60 per cent. This is a very hopeful sign. Terminal methods are more dominant among rural and poor groups while non-terminal methods seem to be pre-

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Source :- Column 1, 2, 3 & 5 - SRS Estimates, Registrar General,India.

Column 4 - Department of Family Welfare.

Column 6 - Report of Standing Committee of Experts on Population Projections.

Column 7 - Census 1991 (Provisional Totals).

Column 8 - Census 1981.

Column 9 - Directorate General of Employment and Training, Ministry of Labour.

ferred with rising incomes and urbanisation. Similarly, with rising income levels and urbanisation, dependence on Government services is failing. Government still accounts for overwhelmingly large proportion of family planning services provided.

2.3.8 Nearly 40 per cent of the, Indian population was below 15 years of age in 1980 whereas only 6 per cent of the population was over 60 years of age. With the recent changes in vital-rates and expectation of life at birth, the age structure of population has changed and in future it is likely to change even more significantly. The projected changes in age structure are shown in Table 2.5.

2.3.9 The proportion of persons below 15 years of age would come down from 40 per cent in 1980 to 35.5 per cent in 1992, and 29.5 per cent in the year 2007. Correspondingly the proportion of the group 15 + will increase from 60 per cent in 1980 to 70.5 per cent in 2007. Thus, the proportion of those needing work will rise significantly. The population of age 60 plus has