More reports on: Economy - general

Farm incomes too low, leading to inequality: Jaitley

25 July 2016

Union finance minister Arun Jaitley on Sunday said agriculture in India barely gave subsistence earnings to farmers and this was leading to inequality.

He said the country cannot afford to have 55 per cent of its people in agriculture whose contribution to the national GDP is only 16 per cent.

"Agriculture in India barely gives the agriculturists the subsistence. In fact people are already under-employed there," he said while inaugurating the Hyderabad campus of Symbiosis International University's (SIU) at Mamidpally near Hyderabad.

"We, the country cannot afford to have 55 per cent people in agriculture whose contribution to the national GDP is only 16 per cent or so. Therefore that creates inequality," he said.

The finance minister said that while India's aspiration was that manufacturing should be 25 per cent of the economy, it was yet to reach there.

He noted India missed the first industrial revolution and also lost the opportunity when the "second and third industrial revolutions came, that is low-cost manufacturing". He said China and other Asian economies benefited more than India.

"Now they say it is the fourth industrial revolution and it is India's opportunity to catch up. Hopefully we may but we are not sure," Jaitley added.

He said the hard reality was that India is a services hub and services contribute about 60 per cent of the national GDP.

Jaitley, however, believes large population could be an advantage for India, if they are trained and converted as human resources.

"We have one of the largest populations. One-sixth of the world's population lives here. One important change which is taking place is that population in most developing countries is contracting. In fact, they are aging," he said.

He pointed out that the family system had also cracked up in those countries. He cited a study that 30 per cent of the families in city of London are single person families.

The finance minister said education had an important role in developing human resources, and it was an economic necessity to create best educational institutions in India.

He said visits to great campuses gave inspiration as one got to see "different India, aspirational India and globally connected and young enterprising minds who want to break the shackles".

Talking about Telangana, Jaitely noted that it was born out of struggle and aspiration. "Obviously it has some advantages. Hyderabad itself is a big advantage.

''Within a short time its ability to catch up is going to be there," he said but suggested that instead of concentrating in and around Hyderabad, the equity should spread across the state.

"I have no doubt Telangana would be way ahead of national average as far as income and earnings are concerned and its ability to push up India's growth because of its natural advantages," he added.


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