For some time now, in political and bureaucratic circles, a smugness has crept in that India has arrived, that it is no longer impoverished and that whatever be the problem, be it scarcity of onion or shortage fighter jets, it can buy itself out of trouble.
In reality, India is desperately poor; it is a country where malnutrition is rife, where children continue to drop out of school in alarming numbers every year and where millions of untrained young people enter the workforce unfit for anything more than manual labour of the hardest kind. In a brake-less hurtle, India’s potential demographic dividend is morphing into a nightmare.
All this is best captured in the UN’s Human Development Index (HDI) rankings where India is a lowly 129th out of 189 countries. China, by contrast, occupies the 85th spot and Sri Lanka an even better 71st position.
Low per capita PPP
One of the reasons for the illusion about India’s wealth is a seductive but dubious country-to-country comparison. In GDP (PPP), India comes a flattering third after China and the United States. The rub is when we start measuring per capita GDP (PPP) as the latest IMF figures indicate.
India’s GDP (PPP) is 43% that of China and only 59% that of Indonesia. It is only slightly higher than that of Vietnam, a surprising star in education, which will get past India sooner than expected. At 118th place, the country is already ahead of India in HDI.
In terms of per capita GDP (PPP), India is much behind France and U.K., each with no more people than Tamil Nadu or Rajasthan. The GDP (PPP) of ASEAN is 80% of India’s, while its population is less than half. Once we strike off its poorest (Myanmar, Cambodia, Laos and Vietnam) the regional grouping’s stellar performance shines more lustrously.
India of course, has the strength of numbers. A recent issue of The Economist states: “as a single country,” it “has tremendous negotiating power.” But all this will cease to matter as other economies in Asia pick up.
Common sense doesn’t prevail
In a recent essay, former Governor of the Reserve Bank of India (RBI) Raghuram Rajan observed that the present government, “instead of building gigantic statues to national or religious heroes,” should be building “more modern schools and universities that will open its children’s minds, making them more tolerant and respectful of one another, and helping them hold their own in the competitive globalised world of tomorrow.” But when did common sense ever prevail in a country that for decades has shown a tendency to pursue the trivial and the unimportant with indefatigable vim?
As Asia integrates, India is busy painting itself into an isolationist corner. Talking about a $5-trillion economy is not going to get us there but a larger vision of what can be achieved e.g. one which envisages embracing Asian economic integration, should help pay attention to things that are enabling East Asian countries to fire — educating and skilling their young and creating infrastructure that works for all.
The Regional Comprehensive Economic Partnership (RCEP), which India refused to join after years of negotiation, is a case in point. It is precisely the kind of programme India should have joined with one of the most vibrant economic regions in the world, one with the potential to bring immense prosperity to not just itself but South Asia as well. But then, as Ramesh Thakur writing in the Japan Times on the country’s refusal to join the RCEP observed, “India has an unmatched capacity to look an opportunity firmly in the eye, turn around, and walk off resolutely in the opposite direction.”
The writer teaches at IISc. Bengaluru