Wheels

Flag of India wheelPhoto Credit: Anomie

The wheel is one of my favorite symbols because it signifies eternity and movement.  Specifically the traditional spinning wheel is used in the Indian flag, and I would like to discuss India for this post, as it is a significant country, culturally and economically.

But it is the Indian state of Odisha (Orissa) that I have been attracted to.  Something about the name starting with the circular ‘O’ and the state’s industrial potential exemplified by Rourkela Steel Plant (the first integrated steel plant built by the public sector of India in collaboration with West Germany–which makes “Ruhr-kela” such an appropriate name) and its Konark Sun Temple with its chariot wheel reliefs.

Konark sun temple chariot wheel Odisha Orissa India

Photo Credit: Mohamed A.

As for the state’s development:

Odisha emerged as the hottest investment destination for new projects as investor interest in “prosperous” states such as Maharashtra, Gujarat, Karnataka and Tamil Nadu declined during 2012-13, latest data released by the Reserve Bank of India showed.

Through a dozen projects funded by bank loans, Odisha managed to get investors to commit to around Rs 53,000 crore investment, a 27% share of all-India investments.  In contrast, Maharashtra is expected to get investment of around Rs 21,400 crore in 70 projects, or 10.9% of the pie.  Punjab was the other surprise, moving to the third spot with a dozen projects expected to generate investments of over Rs 20,600 crore…

…”Share of Odisha has increased over the years due to its mineral resources.  While Gujarat attracted investment proposals mainly in industries like infrastructure, petroleum products, metal and metal products and textiles, project investments in Maharashtra have been across almost all industries with larger share coming from infrastructure (mainly power and telecom), transport services, textile and construction,” RBI said in its analysis.

A senior government in the Odisha government told TOI that the bulk of the investments are proposed in coal mining, steel and a few port projects.  Analysts warned that not all planned investments fructify…

…The central bank predicted subdued investor sentiment during the current financial year as well, as demand remains weak and inflation is expected to inhibit significant reduction in interest rates. “While the government has initiated some steps in the recent past to improve investment climate, results are yet to be visible,” it added….

Rourkela Odisha Orissa India

Photo Credit: Sidharthkochar

Even though not all planned investments bear fruit, doesn’t the amount of poverty that is reduced depend on the amount of investment that can be secured, given a massive population and lower labor cost?

I agree with economist Jagdish Bhagwati, who says that:

“India’s myriad problems have less to do with poor health and literacy than a poor investment climate.  Give people jobs and money and they will invest in their own education and health”…

..Mr. Bhagwati’s embrace of the private sector is widely shared in India.  Only the poorest send their children to government schools and hospitals, and the central government now promotes public-private partnerships.

If investment will provide jobs for the masses of a developing economy, shouldn’t the government concentrate most of its efforts in helping investment flourish?

Especially for the developing world, can the wheel of progress turn without investment?

Tunnel Vision

Photo Credit: Abdaal at en.wikipedia

Sources:

http://timesofindia.indiatimes.com/business/india-business/Odisha-top-investment-destination-in-India/articleshow/22498201.cms

http://www.nytimes.com/2013/08/22/world/asia/rival-economists-in-public-battle-over-cure-for-indias-poverty.html?pagewanted=all&_r=1&

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