印度经济.docx

印度经济.docx

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印度经济

AsGrowthSlowsinIndia,RuralWorkersHaveFewerIncentivestoMovetoCities

MORKAHI,India—Asateenager,RamSinghleftthisremoteruralvillageandmovedtofast-growingNewDelhitochasethespoilsofhiscountry'seconomicboom.

For14years,hetoiledintiny,primitivefactoriesmakingeverythingfromautopartstocomponentsforlightswitches.Hiswagesbarelykeptpacewiththecostoflivingandeventuallyhegaveuponcitylife.

Today,heisbackonthefarm,scratchingoutalivingfromasmallplotoflandnearhisbirthplacewherehegrowscorn,wheat,potatoesandmustard.

"Wheneversomeoneleaveshisvillageforthecity,hethinks,'Iwillearnmoney,'"saysMr.Singh,whoisn'tcertainofhisagebutsaysheisaround30yearsold."Everyonehasdreams,butit'snotalwaysintheirpowertoturnthemintoreality."

JustafewyearsafterIndiawashailedasarisingeconomictitanpoisedtorivalChina—evensurpassit—growthingrossdomesticproducthasslowedtoapacenotseeninadecade.TheIndianeconomyexpandedatanannualrateof4.7%inthelastquarterof2013.ThatmaybesizzlingbyWesternstandards,butitisaseriouscomedownforacountrywhoseGDPgrowthpeakedat11.4%in2010.Inflationishigh,workersaren'tfindingjobs,andindustrializationandurbanizationarestalling.

FormanyinIndiawhoseexpectationsofabetterliferosealongwiththeeconomyinthefirstdecadeofthe2000s,thecurrentslowdownhasbroughtanear-literalreversaloffortune,drivingthembacktojobsandwaysoflivingtheythoughttheyhadleftbehind.

Between2005and2012,asIndia'sindustrialandservicesectorsboomed,farmemploymentshrankby37millionjobs.EconomistsattheMumbai-basedcredit-ratingfirmCrisilnowexpectthatprocesstogobackwards:

By2019,12millionmorepeoplewillbeworkinginagriculturethanin2012.

"Becausetherewon'tbeenoughjobopportunitiesoutsideofagriculture,bothinruralareasandincities,peoplewillremainstuck,"saysDharmakirtiJoshi,Crisil'schiefeconomist."Agriculture'sshareofGDPisshrinking,butmoreandmorepeoplewillbelashedtoit."

That'snotthewayIndia'spolicymakerswantthenextchapterofthecountry'seconomicstorytogo.Votinginparliamentaryelectionskickedofflastweekamiddeepdiscontentaboutjoblessnessandmissingopportunitiesforyoungpeople.

Thegovernment'slatestfive-yearplanfortheeconomy,whichcovers2012-2017,saystheshareofIndianworkersonfarmsis"stilltoolarge,"andplacesgreatemphasisonhelpingtheeconomycreatejobsoutsideofagriculture.

FailuretodosowouldcarryenormouseconomicandpoliticalrisksasIndia'sworking-agepopulationcontinuestoswell.Indianeedstoproduceenoughdecentjobsforthe90millionpeoplewhowillentertheworkforceoverthenext15years.

Butapotentiallabor-driveneconomicboostcouldbecomeacurse,economistssay,ifyoungpeoplearetrappedinrelativelyunproductivejobsinagricultureormenialservicework.

"Indiaisonthecuspofeitherbeingabletotakeadvantageofthedemographicboomorbeingswallowedupbyit,"saysEswarPrasad,aneconomistatCornellUniversity.

Mr.Singh'shomestate,Bihar,isgroundzeroforpopulationgrowthinIndia.Ithas104millionpeopleandthehighestbirthrateinthecountry.Whenheleftin1998,hesays,Mr.Singh'sparentstriedtostophimandurgedhimtostayinschool.Buttheallureofthecitywasirresistible.

Delhi,nearly800milesaway,waskindtoMr.Singh—atfirst.Helikedhiswork:

Hechangedjobsoftenenoughthathewasalwayslearning.Hevisitedthecapital'sMughal-eraRedFortandrodewithfriendsonDelhi'snewsubway,agleamingtotemofmodernityandprogress.

Hissalarygrew—from$10amonthassemblinglightswitches,to$20amonthmakingbrakecomponentsforcarsandrickshaws,andeventuallyto$100asalaborerataproducemarket.Still,herarelyfoundhimselfaheadofhisexpenses.WhileIndia'sinflationratewasneverlowduringtheboomyears,itcrossedintothedoubledigitsby2010.

In2012,withthenationaleconomyslidingintolowergear,Mr.Singhsayshefeltlikehewasfallingbehindinsteadofmovingahead.SohepackedupandmovedbacktoMorkahi,tohisfamily,theirtwo-roombrickhouseandtheiracreoffarmland.

"Wheneversomeoneleavesthevillageforthecityandreturnswithoutearningmoney,itisshameful,"saysMr.Singh."Weusedourownmoneytogotothecity.Wewastedourtime."

Photos:

WorkersReturntotheFarminIndia

VivekSinghforTheWallStreetJournal

Alarge-scalereturntothefarminIndiawouldbeastarkturnaroundforacountrywhoseeconomicstory,untilrecently,wasthatofanemerginginformation-technologypowerhouse.

Considerthelopsidedequation:

AgricultureaccountsforjustafifthofGDP,buthalfofemployment.India'svauntedIT,financeandotherservice-relatedbusinesses,meanwhile,representhalfofoutputbutemployjustaquarterofthecountry'sworkforce.

Themissingingredientismanufacturing.InEastAsia,large,sophisticatedfactorieshaveservedastheconduittourbanlifeformillionsofpeoplefromfarmfamilies.ButinIndia,manufacturinghashoveredataround15%ofGDPfordecades,muchofthisoutputcomingfromsmall,low-techplaceslikethosewhereMr.Singhworked.SouthKoreaandThailandsurpassedthislevelofindustrializationinthemid-1960s.Inbothcountries,andinChina,manufacturingtodayisnearlyone-thirdofGDP.

WhyIndianeverbecameanationoffactoriesisapersistenttopicofstudyamongeconomists.SomeblametheimpedimentsthatallbusinessesfaceinIndia:

erraticelectricitysupply,restrictivelaborlaws,crumblingroads.Otherspointtothecoddlingofgiantcorporationsandtheneglectofsmall-andmedium-sizefirmslikethosefoundinChina'sindustrialcorridors.

Ontheconsequences,however,almostallagree:

AslongasIndia'seconomyfailstocreatethekindoffactoryjobsthatprovideproductive—andremunerative—employmentforunskilledworkersfromvillages,theruralmajoritywillremainlargelylockedoutofthebenefitsofgrowth.

Mr.Singh'syoungerbrother,Lallan,madehisownexodusfromMorkahiin2005,duringhislateteens.Nowhe,too,saysheisplanningtoreturnhome.

Fornearlyadecade,theyoungerMr.Singh,whoisunsureofhisexactagebutsaysheisinhislate20s,hasworkedinDelhi'ssprawlingAzadpurwholesalefruitandvegetablemarket,loadingandunloadingdeliverytrucks.Hesaysheworks12hoursaday,sixdaysaweek,andearnsabout$160amonth.

Thatisbetterthanthe$50amonthhemadein2008,butit'sstillnotenough."Myincomehasgoneup,butinflationhasgoneupmanytimesover,"saysMr.Singh.

Asaresult,nothing—notfood,notrent,notthemedicineforthedenguefeverhecontractedlastyear—hasbecomeeasiertoafford.

Thehardshipsandsqualorofbig-citylifeareanotherfactorinmigrants'decisionstogobacktothevillage—orsimplynevertoleaveinthefirstplace.Planning,infrastructureandhousinginIndia'smetropolisesremaindeficient,discouragingurbanization.

In1990,accordingtotheWorldBank,theshareofthepopulationlivingincitieswasaboutthesameasChina's:

justoveraquarter.In2012,thefigurewas32%inIndiaand52%inChina.LastmonthBeijingunveiledasweepingplantohave60%ofChina'spopulationlivingincitiesby2020.

RamSingh'sfirsthomeinDelhiwasa56-square-footroomthathesharedwithfourorfiveothermigrants.InastudyreleasedinFebruary,theMcKinseyGlobalInstitutefoundthatsucheconomicdeprivationisnolesssevereinIndia'scitiesthaninthecountryside.

"UrbangrowthinIndiaisnotplannedgrowth,"saysHimanshu,aneconomistatJawaharlalNehruUniversityinNewDelhiwhogoesbyonename."It'ssomethingwhichishappeningonitsown."

Indecidingtogobacktothefarm,however,peopleliketheSinghsaren'tonlybeingpushedbydismalrealitiesinthecities.Theyarealsobeingpulled,thankstoexpansivegovernmentprogramsaimedatallayingpovertyintheheartland.

PoorfamiliesacrossIndiaareentitledtomonthlypurchasesofstaplefoodsatcut-rateprices.Tosupplytheserationshops,thegovernmentbuysupgreatquantitiesofrice,wheatandsugaratabove-marketprices,liftingincomesinplaceswherethosecropsaregrown.Delhihasbudgeted1.15trillionrupees,or$19billion,forfoodsubsidiesthisfiscalyear—slightlylessthanwhatithasallocatedforhealthandeducationcombined.

Since2008,allruralhouseholdshavealsobeenguaranteed100daysofpaid,nonfarmworkeachyear—mostlyconstruction,ditch-diggingandothermanuallabor.TheMahatmaGandhiNationalRuralEmploymentGuarantee,astheprogramiscalled,hasprovidedanotherincomeboost:

Between2010and2013,inflation-adjustedwagesformeninthecountrysideclimbed9%annuallyonaverage,afteralongperiodinwhichruralwagegrowthwasalmostentirelywipedoutbypriceincreases,thoughgrowthhasslowedmorerecently.

Butcriticssaythatsuchsafetynetsonlytietheruralpoortounskilledworkanddiscourageurbanization.Inarecentbook,ColumbiaUniversityeconomistsJagdishBhagwatiandArvindPanagariyaarguedthattheprogramthreatenstoslowdownaprocessofmigrationtothecities"thatisalreadymovingatasnail'space."

TheSinghbrothers'casewouldseemtoillustratetheeconomists'point.

RamSinghsaysheisthankfulthathisfamilyownsland,whichmeanshehasneverhadtoseekworkundertheemploymentguarantee.Butforhimandotherschoosingbetweenthegrindofthecityandthecomfortsofthevillage,governmentaidhascreatednewincentivestoselectthelatter.

Thankstoincreasedpurchas