India's Poverty: Possible Solutions IV

Continuing on the discussion of India’s poverty.

I recommend everyone here to read two books:

– The Mystery of Capital by Hernando de Soto

– The Power of Productivity: Wealth, Poverty, and the Threat to Global Stability by William W. Lewis

The second one discusses the effect of Productivity on India’s poverty alleviation (amongst that of other countries). The facts mentioned there are STARTLING to say the least!

India moved from nowhere in Milk Production to world’s largest milk producer thanks to NDDB’s Dr. Kurien. So, we have done fantastic right? WRONG!

The Indian Dairy sector has productivity levels that are roughly 3% of the US Dairy Sector! That is not all… in fact the Indian Dairy sector is world’s LARGEST employer in the world for ANY sector in ANY country – total FTEs = 45 million!

Indian Agriculture sector has a productivity level of 1-2% of the US .. the max we can go to is 3% given our conditions! There is NO incentive for the farmers to go the mechanistic farming route because the labor is so cheap.

Why is this agriculture labor cheap? because the opportunity cost of other alternatives is almost negligible!

How can the opportunity cost of the other alternatives be raised? By bringing in the Industrial sector. It would be foolhardy to believe that Primary Industrial sector can fulfill that need. The best thing for agriculture will be to have a robust Secondary Industrial sector and NOT just Small Scale Industries!

The Secondary sector will thrive if there is a growing Primary sector. But our Activists target the Primary sector with the slogan that it doesnt help the rural poor.. of course it doesnt! It is not meant for that… it is meant to proliferate the secondary sector .. WHICH will employ the rural poor! China well understands this basic equation.

.. and honestly.. THIS is the “Trickle Down Effect” that Mahalanobis and Nehru were so fond of.. except that they had only worked it all out mathematically. not practically!

Our priorities are totally screwed up.. we want to see a baby fed by pipe in the Milk plant that fills up the Milk truck.. and if it cant feed the baby then it should be blown away! Little realizing that unless the Milk truck is filled with milk.. the chances of a baby’s bottle getting milk a week from now are NIL!!