4. What are some of the challenges the economy
India faces?

(i) Providing Essential Public Services for the Poor:

(ii) Regaining Agricultural Dynamism  

(iii) Increasing Manufacturing Competitiveness:

(iv) Developing Human Resources:

(v) Protecting the Environment:

(vi) Improving Rehabilitation and Resettlement Practices:

Explanation:

(i) Providing Essential Public Services for the Poor:

The most important challenge is how to provide essential public services such as education, health to large parts of our population who are denied these services at present. The performance of education and health sector is disappointing. There are large gaps in respect of educational facilities, health care and in related services such as maternal and child care, clean drinking water and access to basic sanitation facilities for the mass of our population especially the poor who do not have even minimum access

.(ii) Regaining Agricultural Dynamism:

One of the major challenges of the Eleventh Plan must be to reverse the deceleration in agricultural growth from 3.2 per cent observed between 1980 and 1996-97 to a trend average of only 1.5 per cent subsequently. This deceleration is undoubtedly at the root of the problem of rural distress that has surfaced in many parts of the country.

(iii) Increasing Manufacturing Competitiveness:

The manufacturing sector has also not grown as rapidly as might have been expected. The average growth rate of this sector has accelerated compared to the Ninth Plan but is unlikely to exceed 8 per cent in the Tenth Plan. It should be targeted to grow around 12 per cent or so if we want to achieve a GDP growth rate of 9 per cent.  

India’s performance in IT enabled services and other high end services is clearly a source of strength that we must build upon. However, India cannot afford to neglect manufacturing activities. We have a dynamic entrepreneurial class that has gained confidence in its ability to compete. We have skilled labour and excellent management capability.  

However, there are other constraints that limit our competitiveness, especially in labour intensive manufacturing. The Eleventh Plan must address these on a priority basis. The most important constraint in achieving a faster growth of manufacturing is the fact that infrastructure, consisting of roads, railways, ports, airports, communication and electric power, is not up to the standards prevalent in our competitor countries.

(iv) Developing Human Resources:

Development of human resources is very much crucial for attaining economic development which poses as an important challenge before the Eleventh Plan. In order to ensure a continuous and growing supply of quality of manpower we need large investments in public sector institutions of higher learning, combined with fundamental reforms of the curriculum and also service conditions to attract high quality faculty.  

The scope for expanding capacity through private sector initiatives in higher learning must also be fully exploited, while also ensuring that quality standards are not diluted. Unless this is done on an urgent basis, we will fail to attain global standards. India has historically lagged behind in the area of technical/vocational training and even today enrolment rates in ITIs and others Vocational institutes, including nursing and computer training schools, is only about a third of that in higher education.

(v) Protecting the Environment:

Environmental concerns are growing globally as well as within the country. While there may appear to be a trade-off between environmental sustainability and economic growth in the short run, it has to be recognized, that in the longer run environmental sustainability and human well-being are not necessarily in conflict.  

Neglect of environmental considerations, as for example in profligate use of water or deforestation can lead to adverse effects very quickly. The threat of climate change also poses real challenge to the well being of future generations which we can ill afford to ignore. Our developmental strategy has to be sensitive to these growing concerns and should ensure that these threats and trade-offs are appropriately evaluated.

(vi) Improving Rehabilitation and Resettlement Practices:

Another important challenges before the Government is to improve the rehabilitation and resettlement practices. Our practices regarding rehabilitation of those displaced from their land because of development projects are seriously deficient and are responsible for a growing perception of exclusion and marginalization.

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