“Despite the global slowdown, India has been one of the few countries to have shown remarkable growth in the last financial year. While this has been an achievement in itself, this growth rate can be taken to double-digits.” This was the key message of Dr. Frederico Gil Sander, Sr. Country Economist, World Bank Group, New Delhi. Dr. Gil Sander was speaking to students at the IIM Ahmedabad as part of the World Bank - IIM Discussion Series. The discussion centered around “Financing Double-digit Growth: Current and Long-term Challenges of India’s Financial Sector”.
Dr. Gil Sander noted that urban consumption and public investment have been the key drivers for current growth. Additionally, a good monsoon this year is expected to give a boost to rural consumption. These, coupled with the promised emphasis on supply-side factors such as labour reforms, the inclusion of more women in the labour force, and the timely implementation of GST can boost economic growth. To further increase this growth rate, potentially to double-digits, these drivers will first have to be augmented by productive capacity investment, which in turn depends on ease of credit availability from banks. However, credit growth in India is marred primarily by high lending rates, priority sector lending regulations and rising non-performing assets (NPAs).
People have been harnessing water to produce energy and perform work for thousands of years. The ancient Greeks used watermills to grind wheat into flour. Ancient Romans used the power of water to cut timber and stone. During the Han dynasty in China, hydraulically operated pumps raised water for crops into irrigation canals. .
Today it represents 16.6 percent of the world’s total electricity production while contributing 80% of the global renewable electricity mix.
Blog 12: Key lessons on road to sharing prosperity
India is home to the largest number of poor people in the world, as well as the largest number of people who have recently escaped poverty. Over the last few weeks, this blog series has highlighted research from the World Bank and its partners on what has driven poverty reduction, what still stands in the way of progress, and the road to a more prosperous India.
This is the last blog in the #Pathways2Prosperity series. You can read all the blogs in this series and keep contributing to the discussion around #WhatWillItTake to #EndPoverty in India.
A thorough review of India’s experience in reducing poverty over the last two decades confirmed some of our previous understanding, but it also revealed new, unexpected insights. On the confirmation side, we found that poverty in India, as in other parts of the world, is associated with a lack of assets at the household level, and especially with limited human capital.
At the national level, 45 percent of India’s poor are illiterate, whereas another 25 percent have a primary education at most. Further down several Indian states, including a few high-income ones, show stunting and underweight rates that are worse than the averages for sub-Saharan Africa. While multiple factors lie at the root of the nutrition challenge, the prevalence of diarrheal disease is thought to be one of the main culprits, and diarrhea is triggered by poor hygiene. Only 6 percent of India’s poor have tap water at home, and a little more than a fifth have a latrine or some form of improved sanitation.
From this perspective, investing in education, health and the delivery of basic services for India’s most disadvantaged people remains a key priority. Investments of this sort would enhance the human capital of the poor, hence increase their chances to prosper.
Here’s something you may not be aware of:It’s a statistic that matters in the face of two unrelenting challenges now facing the globe –how to turn the promises of last December’s historic Paris climate change agreement into reality and how to feed a growing global population.
During a recent visit to Barsam village in the Saharsa district of Bihar, I talked with members of a women’s self-help group - one of over 480,000 such groups formed under Jeevika, a rural livelihoods program supported by the World Bank in Bihar.
Among the group was nineteen year old Shobha. Like millions of girls across the country, Shobha had never been to school. She was married at fifteen, and now has a ten-month old daughter. Shobha sat among us, cradling little Anjali on her lap.
I was happy to hear that, when she was pregnant, Shobha enrolled herself at the local Aanganwadi center which offered nutrition and health services for both mother and child under a public program. At the center, Shobha learnt how to care for Anjali. As a result, the child was exclusively breastfed for six months and received all the necessary immunizations. Now the little girl is being correctly fed a diverse diet of vegetables, pulses, cereals and animal milk, while continuing to be breastfed.
But my happiness was only momentary. As we talked, it emerged that Anjali was only being given a spoonful or two at most of these foods. While the amounts were far from adequate, Shobha thought they were enough for a child of Anjali’s age. And, all the other women agreed.
Is it hot outside? Should I bring an umbrella?
Most of us don’t think much beyond these questions when we check the weather report on a typical day. But weather information plays a much more critical role than providing intel on whether to take an umbrella or use sunscreen. It can help manage the effects of climate change, prevent economic losses and save lives when extreme weather hits.
Where are these 370 million people, who are they, and why they are so overrepresented among the poor?
Only about 8% of the Indigenous Peoples around the world reside in Latin America, a far smaller number than most people surmise. On the other hand, over 75% live in China, South Asia and Southeast Asia, according to World Bank’s first global study of poverty among Indigenous Peoples across the developing world, Indigenous Peoples, Poverty, and Development.
One of the biggest economic benefits of schooling are labor market earnings. For many people, education and experience are their only assets. This is why I believe that it’s very important to know the economic benefits of investments in schooling.
In India’s southern state of Tamil Nadu, I met young ex-farmers who had moved out of farm jobs and were now working in factories and government offices. Their day to day circumstances weren’t all that different from millions of others around the world.
But yet, the people I met were remarkable. There was the disabled young man who, with skills training, found an IT job and a life outside his home, and is now supporting his mother. There were also women Self Help Group (SHG) members who, with support from their female Panchayat Leader, Pushpa, were helping to better the lives of their communities. They worked to improve water supply, build toilets and boost sanitation, and also found jobs in agro-processing.
My time in India made it clear to me that opportunity can change lives - especially in rural areas, where 78% of the country’s poor people live.
Opportunity can come in various forms. It can come in the form of social empowerment - by giving voice to groups that are often marginalized, such as women, youth and disabled people.
It can also come in the form of jobs - through skills training, job placement programs and other services that help people secure formal employment.
Jobs and social empowerment are two different opportunities. But they can be related: They both share transformative effects that are positive, and can multiply in unexpected directions.
For example, as women gain more confidence, their voices are listened to on a variety of matters within the home - such as on family planning and how to spend family incomes - improving the lives of their children and their families. Collectively, the power of their voices expressed through SHGs and other groups can bring about change on a larger scale, impacting the wider community as a whole.
Jobs, too, are known to have transformative effects. They give people the economic resources to improve their quality of life, open up new opportunities and enable them to engage with the outside world.