State of economic divergence; $100 b expatriates club; Jiang Zemin departs
Opinion Watch
State of economic divergence
Before Manmohan Singh with his 1991 Union Budget opened the Indian economy, the per capita income in Karnataka was twice that of Bihar. The difference is now five times. The five southern states have raced far ahead of their northern counterparts, and the institutions such as Finance Commission, which were mandated to aim for balance in growth have only become stunted.
The Times of India in its Editorial based on the findings of the think tank Price has argued that the gulf of economic progress has widened between the South and the North, and also the East. The daily also cited an IDFC report of 2016 to state that India is the only country among the major economy which is defying the trend of subnational convergence. It added that between 2011-2036, India will add 311 million more people, and the five southern states will account only for nine per cent, and they also contribute 30 per cent of national income with 20 per cent population.
This has been well stated for years, which is fueling Tamil nationalism also. The daily forgets that it’s the manpower of Bihar and Uttar Pradesh, which are substantially driving the economy of the southern states. Bihar has been a perennially poorly governed state since 1970s when castes cast out administrative excellence. That malaise spread to neighbouring states. Yet, the institutions which are meant to ensure balanced growth need to be searched for, as they have vanished.
$100 b expatriates club
The World Bank’s latest report states that the Indian expatriates will send as much as $100 billion of remittances to India in 2022. The Economic Times in its Editorial has given an account of the Indian expatriates taking benefits of the lower cost of sending money home, strong demand for the Indian skilled manpower, revival in jobs in the Gulf countries after the pandemic jolt when they raised costs to work there.
Remittances undeniably are key to the stability of the economies in developing countries. The Indian expatriates send remittances which either equal or exceed the annual foreign direct investment in the country. The beauty is that unlike FDI, which is slammed for sending back more in royalty to countries of their origin, the Indian expatriates’ money helps government bridge their current account deficit. The government can at least given a greater sense of pride to the Indian expatriates and even pamper when they visit India. Sri Lankan economy had collapsed largely because of remittances drying up.
Jiang Zemin departs
Jiang Zemin was an accidental President of China, for Zhao Ziyang was to succeed Deng Xioping. But Zhao had spine, and he had shown reservations when the Tiananmen Square protest was violently crushed, and he lost out the summit of his political career.
The Indian Express in its Editorial has run through Jiang’s life, who passed away at an age of 96 years, stating that he was instrumental in China joining the World Trade Organisation in 2001. Jiang propounded ‘Three Represents’ theory, and encouraged Chinese integration with the global economy, while also nursing the private entrepreneurs.
He must have died an unhappy soul, for China is now seen de-coupling with the global economy as Europe and the US, which were instrumental in the setting up of the Chinese manufacturing powerhouse, are now suspicious of Beijing. Also, another protest has hit China, which may not be crushed so easily.
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