Problems Facing India Today – Overpopulation, Illiteracy, Corruption

India is one of the poorest countries in the world. The poverty in India isn’t just psycological poverty. The poverty in India isn’t just emotional poverty. The poverty in India isn’t just social poverty. The poverty in India isn’t just religious and cultural poverty. The poverty in India is an absolute poverty. The poverty in India involves poverty in every aspect of life. We all knew India is a very poor country although not so many of us knew how extreme the poverty level was in India. Now it is very clear how extreme poverty is in India.

Now it is very clear how poor some Indians are. Now it is very clear how people continue to die from absolute poverty and hunger in India despite numerous efforts to help fight poverty in the world. A new multidimensional poverty Index shows that India is far poorer than Africa in both intensity and in number. The Multidimensional Poverty Index developed by Oxford University (which will appear in the upcoming UNDP human development report) shows that India is far poorer than Africa not just in number but also in intensity.

The new poverty measure shows that 8 states out of the 29 states in India have more poor people than 26 poorest African countries combined. The Multidimensional poverty index views poverty from several different angles instead of just GDP figures. India like any other developing country is crippled by so many problems. For example, India’s population growth rate is increasing by the day putting pressure on the limited resources and leaving many Indians in absolute poverty.

India is very poor in terms of education, in terms of economic improvement, infrastructure, heath care, etc. Here are some of the problems facing India today. In today’s India, there is nothing but: 1. HIGH INFLATION RATES. Fueled by rising wages, property prices and food prices inflation in India is an increasing problem. Inflation is currently between 6-7%. A record 98% of Indian firms report operating close to full capacity (2)With economic growth of 9. 2% per anum inflationary pressures are likely to increase, especially with supply side constraints such as infrastructure.

The wholesale-price index (WPI), rose to an annual 6. 6% in January 2007 (1) 2. POOR GIRL CHILD EDUCATION Although India has benefited from a high % of English speakers. (important for call centre industry) there is still high levels of illiteracy amongst the population. It is worse in rural areas and amongst women. Over 50% of Indian women are illiterates 3. POOR INFRASTRUCTURE Many Indians lack basic amenities lack access to running water. Indian public services are creaking under the strain of bureaucracy and inefficiency.

Over 40% of Indian fruit rots before it reaches the market; this is one example of the supply constraints and inefficiency’s facing the Indian economy. 4. BALANCE OF PAYMENT DETERIORATION Although India has built up large amounts of foreign currency reserves the current account deficit has deteriorate in recent months. This deterioration is a result of the overheating of the economy. Aggregate Supply cannot meet Aggregate demand so consumers are sucking in imports. Excluding workers remittances India’s current account deficit is approaching 5% of GDP . HIGH LEVELS OF DEBTS Buoyed by a property boom the amount of lending in India has grown by 30% in the past year. However there are concerns about the risk of such loans. If they are dependent on rising property prices it could be problematic. Furthermore if inflation increases further it may force the RBI to increase interest rates. If interest rates rise substantially it will leave those indebted facing rising interest payments and potentially reducing consumer spending

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in the future 6. INEQUALITY HAS RISEN

It is hoped that economic growth would help drag the Indian poor above the poverty line. However so far economic growth has been highly uneven benefiting the skilled and wealthy disproportionately. Many of India’s rural poor are yet to receive any tangible benefit from the India’s economic growth. More than 78 million homes do not have electricity. 33% (268million) of the population live on less than $1 per day. Furthermore with the spread of television in Indian villages the poor are increasingly aware of the disparity between rich and poor. . LARGE BUDGET DEFICIT. India has one of the largest budget deficits in the developing world. Excluding subsidies it amounts to nearly 8% of GDP. Although it is fallen a little in the past year. It still allows little scope for increasing investment in public services like health and education. 8. RIGID LABOR LAWS As an example Firms employing more than 100 people cannot fire workers without government permission. The effect of this is to discourage firms from expanding to over 100 people. It also discourages foreign investment.

Trades Unions have an important political power base and governments often shy away from tackling potentially politically sensitive labor laws. These are just a few of the problems facing India today. Life in India is nothing but absolute poverty with little hope of survival in the near future. Good education is the key to economic improvement yet India is lacking this essential key in terms of education and hence in terms of economic improvement. what do you think? what are some of the problems facing India today? How can India overcome some of these problems? Who is responsible and who is to be blamed?

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