Case Study 5 - India: Complex Xhallenges and Compelling Opportunitites Flashcards
1
Q
intro paragraph
A
- over the past 30 years, India has emerged as one of the significant yet underappreciated stories of economic development
- despite being overshadowed by China’s economic rise in global perceptions, India’s achievements are remarkable given the unique obstacles it has faced
- India had advanced farther and faster than most anticipated, overcoming considerable challenges along the way
- there is cautious optimism about India leveraging emerging opportunities to fulfill its potential in the coming decades
- to continue its success, India must address several complex and difficult challenges that lie ahead
- this case study emphasizes the key factors behind India’s development to date and outlines the nature of its future challenges
2
Q
background
A
- India gained independence from Britain in 1947, inheriting a deeply impoverished nation divided along religious, language, ethnic, and caste lines
- progress was slow until the 1990s, when economic development accelerated significantly: creation of national identity, achievement of real democracy for over a billion people, Green Revolution and elimination of famines, established industrial and technological advancements, significant reduction in extreme poverty and deprivation, through challenges remain
- India’s growth rate has generally increased over the decades
- the license raj system, requiring government permissions for major economic activities, stifled investment and fostered corruption; market-oriented reforms since 1991 have driven more dynamic policies and higher productivity growth
- with the right policies, including expanded private-sector investment and effective government intervention in key areas, analyst s believe India can potentially have a significant growth rate
- 2047 vision is that India will be the world’s largest country by population and one of the leading nations globally; the challenge remains to fully overcome poverty and achieve high income and human development for all citizens
3
Q
poverty and vulnerability
A
- India has the highest number of poor people in the world
- about a quarter of people in extreme poverty live in poverty
- each year, health issues push close to 10 million people back into poverty, highlighting the need for health sector reforms
- despite challenges, India has made significant progress in reducing poverty and human deprivation, particularly in the poorest areas and among marginalized groups
- continued progress depends on addressing issues in agriculture, education, health, jobs, and the environment, and improving poverty programs
4
Q
agriculture
A
- India made significant agricultural advancements through the Green Revolution
- millions have left agriculture for the service and industry sectors
- despite being the world’s second largest producer of wheat and rice, India ranks 60th in yield; agriculture contributes only 15% of national income, but half of Indian families still rely on it for income
- there is considerable post-harvest waste, and the country remains dependent on monsoon rains for irrigation, though less so than in the past
- climate change is affecting agricultute by increasing rainfall variance and reducing river flow due to melting glaciers
- wasteful irrigation practices are depleting water resources, affecting national food security and human development
- family farmers can benefit from digital technology and new hydro-meteorological equipment
- much government spending is wasteful or misdirected, with subsidies mainly benefiting large, well-off farmers; women in agriculture are underappreciated and neglected
5
Q
gender equity
A
- gender inequality is a serious issue in India, as evidenced by available statistic
- more male than female births, reflecting practices like infanticide and less medical care for girls
- a very small percentage of women participate in the labor force, and it has only been decreasing; some women need permission from their husbands to work
- gender inequality reduces women’s ability to work and discourages education, negatively affecting future generations
- son preference impacts girls’ education, nutrition, and health, and an imbalance in the male to female ration could lead to social stability issues
- HDI for women is lower than for men, this is influenced by lower average years of education for women;
6
Q
education and literacy
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- access to quality education is crucial to address workforce challenges in the next two decades
- universal enrollment took too long to achieve, and now the focus is on improving school quality in rural and low-income urban areas
- many children leave primary school far behind in reading and math skills
- while India produces highly educated professionals, there is inequality in educational resources, especially for disadvantaged citizens
- private schools have expanded, but teacher qualifications are often lower, and parents may not get value for their money
- high school fellowships increase perceived benefits of education among students and patents, low-cost tutoring programs show positive results
- India spends a small portion of its income on education compared to global standards, increased investment is possible with taxation reforms
7
Q
nutrition, health, and sanitation
A
- India has made progress in child nutrition, health, and sanitation, but this is below expectations for its income level
- public health spending is very low
- life expectancy in India is 68.8 years, rising but still lagging behind in comparison
- sanitation is critical for health, particularly in preventing diseases like diarrhea that affect nutrition absorption
- less than half of urban households have formal piped water supply
- Swachh Bharat (clean India mission) aims to eliminate open defecation, construct household and community toilets, clean streets/roads/infrastructure
- social and financial incentives, such as promoting marriage only in households with sanitary toilets, have been leveraged to improve sanitation
- rural health clinics face chronic issues like staff absenteeism
- solutions could include monitoring, better staff qualifications, training, performance-based pay, and community feedback mechanisms
- a lack of health knowledge is common, but awareness campaigns can significantly impact behavior: randomized evaluations demonstrated that informing households about contaminated drinking water led to increased water purification efforts
8
Q
demographic challenges and opportunities
A
- India is the most populated country
- fertility rates have fallen
- sterilization policies led to public outrage and backlash
- family planning gained wider acceptance due to rising incomes and state-level incentives
- a strong male bias emerged, especially in northern and more wealthy states
- Kerala is a model state as it achieved dramatic fertility reduction without coercion and high female literacy and public discourse on family planning contributed significantly
- changing social attitudes, awareness of women’s empowerment, and media influence have shifted perspective on family size
- Kerala’s success highlights the importance of social and economic development in fertility reduction
9
Q
jobs
A
- India has a young population
- India has the potential for significant economic growth due to its large working-age population
- younger workers tend to acquire job skills faster, presenting an opportunity for enhanced productivity if jobs are created
- the IT industry has been a major success story but employs a relatively small proportion of the population
- women’s labor force participation is strikingly low
- India risks losing out on half of its potential workforce, as more women drop out of the labor force
- major structural changes are needed, including: active labor market support programs, targeted and effective industrial policies, poverty reduction programs, and regulatory reforms to make it easier for firms to hire and lay off workers
10
Q
environment and pollution
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- India hosts the most polluted cities globally, causing significant health issues, including reduced life expectancy
- water scarcity is a growing concern, with worsening conditions impacting agriculture and daily life
- over half of India’s electricity is generated from coal, contributing to severe health impacts and greenhouse gas emmisions
- coal production intensifies water shortages and generates long-lasting environmental damage
- coal plants, as long-term investments, will shape the energy landscape for decades
- addressing pollution and environmental degradation requires improved regulation, a shift in societal norms, and a focus on green infrastructure
11
Q
infrastructure
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- improved infrastructure, such as quadrilateral highway system connecting major cities, has significantly boosted efficiently and productivity
- highways reduced transportation barriers and enhanced firm efficiency
- notable advancements in infrastructure have been observed in urban areas, however, rapid rural-to-urban migration presents challenges in managing urban growth effectively
- India’s rapid urbanization demands significant investments and strategic planning to ensure sustainable living conditions in cities
- significant differences exist in development levels across states
12
Q
institutional challenges
A
- India ranks poorly on global indices
- extremely low judicial procedures
- judicial effectiveness is rated low, with insufficient judges causing delays and perceived corruption concerns
- the police force is understaffed and lacks gender balance, with reforms needed to address gender-based violence and improve local policing programs
- suggestions include benefit cost assessments of regulations, regulatory independence, streamlining multiple authorities, and modernizing regulations
- state-owned enterprises need efficiency improvements and, in many cases, privatization
- social inequalities and divisions risk undermining the benefits of India’s demographic dividend and need urgent attention
- as a democracy with a free press, India has unique opportunities to implement institutional reforms and prevent worsening conditions
- democracy itself can support the development of good institutions
- current challenges are surmountable and the alignment of opportunities could support transformative economic growth if seized effectively
13
Q
how does India’s economic growth story compare to that of China? what factors have contributed to India’s success in economic development, and what challenges does the country still face?
A
Looking at the two countries and their history, it is obvious that they have both achieved great economic growth but have done so in different ways. China had a focus on manufacturing and exports. On the other
hand, India had a focus on the service sector. China’s economic model is state-driven and export-led growth, while India is market-driven, domestic consumption-led growth. The study explains that India’s success is a result of many factors including “foraging national identity, achieving real democracy at an unprecedented scale of over a billion people, a pioneering green revolution, eliminating famines, a fully established industrial revolution now extending in several sectors to advance technology, and substantially reducing extreme income poverty and multidimensional deprivations”. Despite having some success in different areas, there are still some challenges India faces including managing urbanization, specifically improving school quality in rural and low-income urban areas.
14
Q
discuss the strategies India has implemented to reduce poverty. which strategies do you think have been the most effective.
A
India has implemented various strategies to reduce poverty, including economic liberalization, social welfare programs, agricultural reforms, and investments in education and health. Market-oriented reforms since 1991 improved private sector growth, which resulted in increased employment and productivity. The green revolution improved agricultural output and reduced food security. MGNREGA gave wage employment to rural workers, which decreased unemployment and reduced poverty. Efforts in enhancing education, like expanding school enrollment and the introduction of low-cost tutoring, have also likely contributed to poverty reduction. All of these are essential, but economic reform and employment generation programs like MGNREGA seem to be the most effective as they are direct income support and with long-term economic growth and human development in mind.
15
Q
how can India address the cultural preference for male children and promote gender equality while managing its demographic challenges?
A
- India can promote gender equality by promoting more education for women. For example, women only get about half the amount of education compared to males. By having more women becoming educated it can also increase the education and literacy rate for the country as well. Not only that, having more people educated, it can break the cycle of poverty
- in addition, they can also encourage more women to work since the labor participation rate for women is about 27%. By promoting more women to work, they can create more equality amongst males and females.
- increase proper medical care for women. This can decrease the amount of deaths for women while also increasing life expectancy for the country.
