"Though India's founders favoured creating Indians in spirit and political consciousness, yet they failed to create one economic India". How far do you agree with this view? Give opinion.
Published: March 5, 2017
The imperatives of preserving sovereignty for the states has made the founders of our constitutions not create one economic India and one market place, which would mean unimpeded movement of goods, services, capital, and people. However, this year’s economic survey has dedicated two chapters analyzing how far India is de facto and de jure one economic India.
Contrary to the differing views and perception, India is indeed highly integrated internally with respect to the flow of goods and people. The following facts support this view:
Estimates of migrant flows based on railway traffic data for the period 2011-16 is close to nine million people. With this trend, India may soon reach the magnitude of migrant flows within China.
Interstate trade in India is relatively high. India is well integrated internally on this front. India’s international trade to GDP ratio is now higher than that of China and appears to be quite robust. India’s internal trade as a percentage of GDP is 54%. It is comparable to other large jurisdictions. Although it ranks below United States (78%), Brazil (76%), and China (74%), it ranks above European Union (20%), Canada (12%) and Indonesia (12%). This data contradicts the image of India as a barrier-riddled economy.
In addition, India is in the verge of implementing “one India, One Market, One Tax” via the Goods and Services Tax (GST).
Language not a barrier
In India, language does not seem to be an impediment for the flow of people or goods internally. Not proclaiming Hindi as a common language does not seem to hamper the movement of goods and people across states.
With all the data and facts, it can be concluded that in India greater internal integration do exists. But what is worrisome and surprising is the fact that this greater internal integration has not led to a narrowing of income gaps across states. With GST, these oddities are expected to be addressed.
Model Questions Category: 058 - Indian Economy Issues Relating to Planning