Gurgaon, Jan. 17: Speaking at a session entitled Indices for
Development: Need for change at the Partnership Summit organised by
CII, Finance Minister P Chidambaram asserted that growth is undoubtedly
the most important indicator of development.

Without growth,
there is no chance of lifting people out of poverty. He outlined three
important consequences of growth: it creates more employment, it
generates more opportunities in the hinterland and gives the state more
resources to increase social spending, he said further, adding India’s
experience over the last several years bears out these facts.

Employment
generation has increased substantially, infrastructure has been created
in the hinterland and the central government has been able to increase
its spending on health and education.

In view of these factors,
Chidambaram felt that growth should remain the first priority of his
government. He was also confident that growth would remain strong given
that the key drivers of growth – consumption and investment – remain
buoyant. India’s savings and investment rates had recently increased,
so that an investment to GDP ratio of over 35 percent could be
maintained.

Talking about development indicators other than
growth, Mr. Chidambaram felt that they are certainly important. Poverty
cannot be described just as the absence of income. Equally important
are characteristics such as lack of education and healthcare, skills
for getting high value employment, no ownership of assets and no access
to capital. He pointed out that in the state of Uttar Pradesh one
million children do not go to school. These children will be doomed to
a life of poverty.

He said that the social well being of the
people is better captured by human development indicators such as
infant mortality, maternal mortality, literacy, life expectancy at
birth and per capita expenditure on health and education. The UNDP’s
Human Development Report has popularised this approach to development.
Dr. Amartya Sen’s work in this area, characterising development as an
endogenous process, has also gained popularity. It is true that there
is no one-to-one correlation between high income and a good quality
life. Equally, there is no trade-off between economic growth and
positive social outcomes.

In response to a question on the slow
rate of growth in agriculture, Chidambaram said that while the medium
term objective is to increase government spending on health and
sanitation in rural areas, in the longer term, more people have to be
weaned away from agriculture. We do not need to have 65 million people
engaged in agriculture in order to produce food for one billion people.

Introducing
the session, Mr. Seshasayee, Past President, CII and Managing Director,
Ashok Leyland said that while India had been fairly successful in
pursuing strong growth, there are questions about whether the growth
experience has been inclusive. (ANI)