Finance Minister P Chidam- baram has predicted that India will eradicate poverty by the year 2020 by sustaining seven per cent growth and pushing it up to eight per cent by the turn of the century.
Chidambaram, who was the keynote speaker at The India Conference, sponsored by the Confederation of Indian Industry (CII), Coalition of Service Indus- tries (CSI) and The Washington Post here on Tuesday, noted that the proportion of people below the poverty line was placed at over 60 per cent. He recalled that for 30 years, India grew at 3.5 per cent, and for 10 years the country grew at an average of about 5.5 per cent.
Chidambaram said since economic reforms were instituted in 1991, in the fourth, fifth, and sixth year, we have touched seven per cent.
More From This Section
He said he was confident that India can sustain seven per cent growth and that by the turn of the century, we can aim for eight per cent growth. Chidambaram said: If we sustain seven per cent growth and move toward eight per cent, by a matter of simple arithmetic based on compound interest tables, which are known to every banker, our per capita income will reach $1,500 for year 2020. At that level, poverty in India as we know it for 5,000 years will be abolished.
He explained that the prerequisite for the abolition of poverty is growth, and noted that there is enough empirical data around the world that sustained high growth makes a dent into poverty, reduces poverty.
The finance minister said, High growth gives me the capacity to appropriate larger and larger sums of money to intervene in areas where I believe the government should intervene and they are health and education.
He said high growth coupled with focused intervention into health and education will, I believe, suck many million people into the productive system.
Chidambara- m noted that millions in India remain outside the productive system and if this situation can be reversed, they will get jobs or they will start to own businesses, they will start services and they will find new avenues for their products, and I believe then per capita income will grow in that manner.
He said our calculations show that at $1,500 per capita, India will never be rich as the United States for many years, but abject poverty will be abolished.
When comparison with China was brought up Chidambaram asserted he would never compromise the countrys vibrant democracy for enhanced growth in order to wipe out poverty. I do not wish to rule by fiat, he said.
We are a heterogeneous, plural society. We are divided into 25 states. We have 15 recognised languages and all the major religions, he said.
Such a country can only be ruled under the democratic system, he added.
Chidambaram acknowledged, This means that we have to persuade, negotiate, cajole people into forcing a consensus, and I do that from time to time. I adopt one or other tactic to push the reform process forward.
He said, it may appear that we are constraining growth since we are a practising democracy.
Chidambaram declared, I value the freedom that we have, I value the fact that we are a free people, a free nation, that we recognise human rights in our country, we are ruled by law, we have a free press, we have an alert, vigilant judiciary. These are the values that I am not willing to trade for a one per cent or two per cent additional growth.
Chidambaram said, Our system will result in more durable growth in the long-term, (and) I do not think that democracy and development are inconsistent or incompatible to each other. He said, The road that we have taken is the road on which I believe all 960 million can walk proud, tall and with dignity.
Earlier, Chidambaram disputed the contention that there is much greater diversity of investors coming into China than India, particularly among the small and medium-size businesses. He said small and medium-size companies were coming into India quietly, without hitting the headlines, but these collaborations are taking place virtually everyday.
Chidambaram also emphasised that we are not in a India versus China situation. China is China, India is India. He said that private capital flows in the world are large enough to take care of the requirements of both China and India.
Finance minister confident of wiping out poverty by 2020
If we sustain 7% growth and move toward 8%, by a matter of simple arithmetic based on compound interest tables our per capita income will reach $1,500 in year 2020. At that level, poverty in India as we know it for 5,000 years will be abolished. P Chidambaram, Union finance minister