There are five myths about the Indian economy which hold back our reform process. The trick is to turn them around and move faster. These are, first that India has started growing only recently and its growth is fragile; second, that its economy is not undergoing any structural changes, particularly in employment; third, that it is not urbanising; fourth that it is not diversified; and fifth that its population is largely poor, now being stated at 80-90%. The flip side of all these myths generated by very influential institutions gives us the five laws of growth.

There were outliers like Arvind Virmani and your columnist who have been arguing from the mid-nineties that India has been growing at a respectable rate from the eighties, but even in the first part of this decade the country was seen globally as a basket case. Its growth story really hit the world around five years ago but it would be wrong to accept that it cannot grow at around 9%. Its savings rate is already respectable and the growth of factor productivity should go up from around 3.5% to 5%. The first acceptance of this was in the PM?s speech to small and medium industry where he said that the technology focus of the National Manufacturing Competitive Council has to be implemented. V Krishna Murthy has also given a roadmap for India?s manufacturing technology policy, which every fast growing Asian economy has. Unfortunately, the Eleventh Plan ignores this aspect and fails to build targets of productivity growth in addition to savings growth. It is easy to ask households and companies to save more but difficult to support them to produce more with less inputs.

Influential analysts will say that 70% of India?s workforce depends on agriculture. Some will say 60%. But those who read the statistics know that 70% of India?s labour force depended on crop production in the sixties. This figure has gone down to 54% by 2000 and is still falling. There are states which account for more than 50%, and were below 45% in the beginning of the decade and are now lower. We have argued this out from nineties onwards. It is the HDI report which has highlighted that migration has been growing for a period and is one of the cornerstones of India?s growth and change. We should accept this and move on to help the poor to move from a poor village to a more prosperous larger one or towards larger towns and the metros, MNS permitting. Reform and migration are the single largest sources of growth and competitiveness for the Chinese economy. In India, it is the mindset which needs to change. This is particularly so since NREG and the food security policy will give a floor to encourage the poor to do better by moving where the larger opportunities are.

Outliers like me and SR Hashim kept on arguing that the economy would urbanise faster and 55% of the urban population target would be reached almost a decade earlier than the official projections. Rakesh Mohan had sympathy with us but was sceptical. Two years ago, the UN system came out with a bang and showed that on a definition comparable to the OECD definition, India was more than 90% and in terms of the Brazilian definition more than two-thirds urban. Further, they gave a satellite picture showing that India?s spread of settlements is much greater than other countries. This urbanisation is the flip side of the migration story and we need policies to support it in a big way.

India?s economy is diversifying in ways we have not imagined earlier. The FAO is quite right in arguing that when you grow beyond a per capita income of $3,000 in purchasing power parity terms, non-cereals and non-crop based agriculture grows at a much faster rate and past elasticities of demand, read experience, become irrelevant. The shortsighted nature of macro policies for the food sector concentrating only on the urban consumer is causing havoc. Little has been done for infrastructure, markets and communication and for partnerships between producers associations, cooperatives, corporates and the farmer.

Finally, it is rubbish to say that more than 80% of India?s population is poor and more than 90% if $2.5 a day is taken as the poverty line. The World Bank which says this has done very little work on purchasing patterns among India?s rural and poor people. Its estimates are based on the consumption patterns of rich countries. Chairman of our Statistical Commission R Radhakrishna in his younger days had built up separate price indices for the rich and the poor for rural and urban areas. They need to learn from this work. Our own poverty and hunger estimates are much better. The food security programme, if wisely done, will make a major dent. There is the fact of rising aspirations of our population. This can be structured only in a larger vision of growth and not by branding more people as poor.

?The author is a former Union minister