"The battle for peace has to be fought on two fronts. The first front is the security front, where victory spells freedom from fear. The second is the economic and social front, where victory means freedom from want. Only victory on both fronts can assure an enduring peace." These words, spoken by the US Secretary of State during the founding conference of the UN, remain as true today, as they did, when he uttered them, in 1945.

India is one of the best performing economies in the world. She has joined the select group of countries with a trillion dollar economy. The second trillion to India's GDP could be added in aboutten years. India is nowthe fourth largesteconomy on purchasing power parity basis and will soon surpass Japan to become the third largest. However, there is other side of India too.

Majority of Indians earn less than 2 dollars a day. Nearly 200 million people still do not have access to safe drinking water and more than 700 million people lack proper sanitation facilities. India has the highest percentage of anemic pregnant women in the world. Nearly, half of our children remain chronically malnourished. There are serious issues of poor infrastructure, fiscal stress at the state level, tariff distortions and administrative bottlenecks. The lopsided development of tertiary education has resulted in a huge pool of technical manpower co-existing with a mass of illiteracy. There are concerns that even the educated manpower, lacks the skills that are relevant. Tata Consultancy Services has stated that they recruit from only 100 out of over 4000 engineering institutions in the country. L&T has complained about the shortage of skilled civil engineers for projects. There are serious shortages co-existing with unemployment.

Although, the contribution of agriculture to GDP has fallen from 54 % in 1951 to around 18 % today, nearly 55 % of the workforce still remains dependent on it. Due to lack of migration of population from agriculture into value addition or to manufacturing, there is increasing impoverishment of those in agriculture. Incidents of farmers' suicides are a manifestation of this.

As it is, IIM graduate gets $100 a day for 365 days, millions of poor labourers,cannotexpecteven$1 adayforlOOdaysinayear. IlMgraduatesarein short supply, their salaries are bound to increase rapidly; unskilled labourers are in plenty, their wages are bound to stagnate. Evidence suggests that income inequality is rising and that the gap in average per capita income between the rich and poor states is growing. There is substantial disparity in social indicators, suggesting that not only income is low in the poorer states but also the quality of life is worse. The persistence of lagging regions, with substantial concentration of the poor, is raising concerns about social and political stability of these regions, with possible fallout for the country as a whole.

We are entering one of the most critical periods in India's history. The next ten years will determine whether we will take our place amongst the group of nations like South Korea and Taiwan that have made their way from poverty to moderate prosperity in a couple of generations, or whether the last few years have flattered only to deceive whether the tremendous Indian growth of the last 5 years, following on the growth acceleration starting in the 1 980s, is simply a growth spurt whose underpinnings are unsustainable. The answer depends upon the growth model India chooses to follow. It is widely believed that only through socially inclusive growth, many of the domestic sources of conflict arising out of real or perceived deprivation can be avoided, making the state less vulnerable to external pressures and interference, thereby providing security and stability and in turn sustained high growth rates. How can this be achieved?

Public investment, in not so well endowed areas can be a possible option. When public goods are substantial, the harshness of wage differentials gets softened. Excellent public transport makes the ownership of cars less of a necessity. Good free schools can provide an alternative to private schools. Good free health care will reduce out of pocket expenses. However, as we increase public investment, new institutional mechanisms to raise the efficiency of these investments would have to be put in place. We all know that Governance systems of the past have failed to maximize outcomes and emphasis has been on monetary rather than physical targets. The delivery systems of government be they primary health centres or schools are far from adequate. We need institutions of governance that can move towards achieving private efficiency in public investment.

In a democracy, policies must respond, to the demands of many interest groups. The problem arises when it becomes a zero sum game i.e., when an increase in benefit for some implies a decrease for others. If the interests of the poor can be served only at the expense of the rich, the politics of that conflict may make it difficult to implement such policies. To convert this into a positive sum game, where everybody benefits, the availability of resources must expand through economic growth. This will increase development options. Coming to security dimension, we have to admit the hard reality that while mankind has succeeded in achieving outstanding progress in a number of fields, it has failed in making the world more secure. Situations of potential conflicts and wars still exist. Besides, new dangers are also emerging partly due to globalization, which include the proliferation of weapons of mass destruction, extremism and terrorism, international crime, trafficking in drugs, money laundering and the like. There are also, new non-traditional threats like global warming, competition for scarce resources of water, energy and strategic materials, cyber warfare, genetic engineering and possible weaponisation of space. This emerging grim scenario, poses a big and formidable challenge to our security environment. 'Security' is an indivisible concept. No country in today's world can remain in isolation. The nature of threats, we face today is trans-national. No nation can meet these threats and challenges alone. Countering them requires joint action through enhanced vigilance, information sharing, improvement of border infrastructure, capacity building and mutual legal assistance in criminal matters, besides extradition treaties.

Given the occurrence of war, between two countries, the country that is more egalitarian, at the moment of military decision, is likely to emerge, the victor. Research has shown that democracies are generally speaking egalitarian, in comparison with most other forms of government, and so the hypothesis, of democratic victory has a certain amount in common, with the hypothesis, of egalitarian victory. India's democratic set-up, gives it a definite edge, in both internal and external security.

India has come a long way since independence in 1947. India's independence was a moment of joy, "tryst with destiny," as Nehru, India's first and longest-serving Prime Minister, memorably put it. However, that pledge remains only partially redeemed. Half the battle still lies ahead. A universal-franchise democracy like India is bound to feel inclusionary pressures. Many more would like the fruits of the economic boom to come to them. The greatest challenge for India's policy makers today is to find ways in which globalisation works for all.