Is India really shining?
In the face of the worldwide economic downturn of 2008, the Indian economy stood strong. Over the period when the old world economic giants like U.S and U.K were struggling to get their economies back on track the demand for consumer goods in India actually went up. The word shining is used as an adjective to quantify prosperity and economic growth and these facts indicate the same. However a broader analysis of the Indian situation will provide a somewhat different picture.
In the 63 years after independence, India has become quite the global brand. Up to the 2010-11 financial year a lot of FDI has been poured into the country, the GDP of the country has been steadily growing and the first estimate for the current year was 9%. This was due to the favorable economic situation enjoyed by the country (strong indigenous industries) and the confidence of the major foreign investors and the disinvestment measures of the government itself to augment the budget resources. However the revised rate of GDP for the current year stands at 8.5%, the reason being that inflation has reached an all time high of 9% percent much higher than the acceptable RBI limit of 4.5 to 5%. All the increments in the repo and reverse repo and in conjunction with them in the newly established Marginal Standard Facility, increments by the RBI from April 2010 to June 2011 have not been able to curb this inflation.
Despite this huge inflationary situation the GDP will continue to grow. This forces us to look deeper and instantaneously we find that a country with only 74% literacy rate, a vast populous of 37% living below the poverty line, inflation hits these sections the hardest. The Indian society allows for the monetarily advantageous sections to advance further while neglecting and even negatively impacting the poor and the uneducated. In terms of the middle class it is only visible in the urban centers. While they along with the upper classes generate enough demand...