While Mao Zedong was the father of the Communist China, his successor Deng Xiaoping must be credited for the nation’s progress toward prosperity. Under his leadership, the party ratified and implemented the “Four Modernizations” program that would propel China onto the global stage, where it is fast approaching the leadership position. This ambitious program of sweeping economic reforms opened China to the outside world. But the last decade has seen deterioration in such optimism, as “the very limited agricultural resource base and lack of basic rural infrastructure, coupled with a deplorable health status and level of educational attainment, not only constrain the effectiveness of government poverty reduction programs in these areas, but also severely hamper single-sector agriculture and rural enterprise development interventions.” (Herd & Dougherty, 2007) Hence, in order to improve the effectiveness of poverty reduction strategies, “revitalized social services should be integrated with improved agriculture and rural enterprise development programs. The most cost-effective large-scale poverty reduction approach may be to expand opportunities for out-migration of surplus labour from poor rural areas to more developed rural and urban areas, where there is stronger demand for unskilled workers.” (Harris-White, 2003)
Coming to the question of economic strategies in India, since the starting of the liberalization and deregulation phase, the country has largely come to depend on private corporations for infrastructure development. The successive governments during the last 15 years have been reluctant to initiate infrastructure projects – as raising taxes would result in unfavourable public opinion. But a country’s economic advancement is inevitable linked to its infrastructure and one cannot manifest without the other. This flaw had already started to expose some limitations. The meagre budgetary allocation for highways and railroads had led to a substandard transportation facilities. Government investments in energy, water-treatment and sewage-treatment plants had been disproportionately low. Such a scenario will not lure trans-national companies to set up operations in India as it had done in the past. They may alternatively look east towards countries like China, Taiwan and Philippines that are more advanced in this regard (Harris-White, 2003).
While the professional classes benefited from the period of economic bonanza, the overall picture is not so pretty. The percentage of people living below the poverty line had not declined. While consumer’s individual demands are being supplied by the market, their collective needs such as a clean environment and a robust health-care system are not striven towards. The income gap between the most affluent and the down-trodden sections of the society had widened during the last decade. These factors have led to an air of tension and ill-will among the populace. In some of the above mentioned aspects China and countries in south-east Asia offer better standards (Herd & Dougherty, 2007). Unless the policy makers in New Delhi make necessary changes in the development model and adopt a comprehensive notion of prosperity and well-being, the recent flourish may ultimately prove to be no more than a flash in the pan. Morevoer,
“The elimination of widespread poverty, as in India, requires both rapid economic growth and greater economic equity. In the context of a distribution of wealth which is initially very unequal, a rise in the level of per capita income without any significant improvement in its distribution will leave most people in poverty for a long period of time. And in the context of an initial level of per capita income which is close to subsistence, a redistribution of income without much economic growth offers very limited opportunities for economic improvement. Poverty in India can be overcome only by a very substantial growth of per capita income achieved in the context of a significantly more equal distribution of income.” (Srinivasan, 2003)
The Indian economy has been growing at a phenomenal rate over the last few years. It is expected to maintain that rate in the near future too, which would make it an economic superpower in its own right. While this turnaround in India’s economy is a source of celebration for the world community, there are some genuine reasons for worry as well. The foremost of the concerns is inflation. The high growth is matched by a high inflation inducing confusion in the minds of consumers. The rising prices of commodities had sapped much of the initial optimism. Adding to the concern is the likelihood of uneven economic development in the future. This situation is likely to generate popular opposition among the masses and “sooner or later the poor people of India will succeed in organizing themselves so as to bring about the fundamental redistribution of effective power without which poverty in India will never be overcome.” (Hilton, 2006)