Behind the reporting of the visit by Prime Minister Rajiv Gandhi is another important story, and one that has not been sufficiently told: the story of India's substantial economic progress.
Anyone who has spent time in India will realize that the key to the country's development is the rehabilitation of the villages -- there are more than 600,000 of them -- and participation of the rural poor in the development process. And that means unlocking India's great potential in agriculture, the mainstay of its economy.
I am one of those who believe that India's food production capacity, and its efforts to realize that capacity, has been grossly underestimated. During the past year, despite a mediocre monsoon, food grain produced by Indian farmers reached a record of 153 million tons, an increase of more than 100 percent above the 72 million tons produced in 1965 at the start of the "Green Revolution." In India today, the growth rate of agricultural output is above the population growth rate. The country is now capable of feeding its people through good and bad years; it is not only producing enough food, but it is also storing and distributing it effectively and at present has a surplus available for export.
To stimulate rice and wheat production, food policies in India were adjusted to balance the interest of the urban consumers, who wanted cheap food, and those of farmer-producers, who wanted to obtain reasonable prices for their crops. A liberalized pricing policy gave farmers the incentives to produce more and to raise their productivity. The threat of mass famine faded as these incentives began to work, along with an expansion of irrigation, improvements in the storage and marketing of food, and advances in agricultural research.
The drought that afflicted India in 1979-80, exacerbated by power shortages, would have meant mass famine in the 1960s. India suffered another drought in 1982. But because of the impressive agricultural performance, those two severe droughts did not bring about the famines that would certainly have occurred without these advances.
Liberalization of the Indian economy has begun to move forward on other fronts as well. Relaxation of restriction on imports, for example, has already introduced new elements of competition in India's industry. And a higher degree of competitiveness will certainly help to strengthen an underdeveloped private sector and improve the country's export performance. Thus, prospects for India to attain consistently higher export growth rates are good despite a disappointing average growth of about 4 percent annually during the past four years -- caused in part by the global recession.
India's recent economic strategy also emphasized efficient use of energy and speedy development of domestic energy resources. India's dependence on oil imports declined from 63 percent of consumption in 1979 to about 37 percent in 1983; this year, it is expected to drop to 30 percent.
In general, India managed its economy prudently and carefully throughout the prolonged recession that plagued the global economy. As a result, today it is not handicapped by a debt problem. The country has achieved a yearly growth rate of 5.1 percent, quite close to the target of 5.2 percent set in its plan covering the five years to March 1985. The underpinning of this growth has been the very high rate of investment, sustained largely by domestic savings.
In assessing India's economic performance, it has to be recognized that the role of foreign economic aid has been modest. External resources have accounted for only about 7 percent of total development funds. But these and other aid funds are crucial for the overall "mix" of India's development financing. With per-capita income of only $260, India still belongs to the poorest group of countries in the world.
The better life that Rajiv Gandhi wants for India's poor, and envisions as well for the impoverished peoples of other countries, deserves our support, including support for the financing of such activities as the International Development Association, the World Bank's concessional lending affiliate.
With such external assistance, there is no reason why India should not continue to demonstrate economic progress at home and be a convincing voice persuading the world at large what global economic cooperation can do for the developing world.