Home / Opinion / Why hasn’t India moved in a decade?

One of the more unusual aspects of India’s economic development is our comparative standard of living. In the national gross domestic product (GDP) growth rates, of course, we compete with China.

In the human development (HD) index, which the UN defines as the “summary measure of average achievement in key dimensions of human development: a long and healthy life, being knowledgeable and have a decent standard of living", we are racing with the likes of Tajikistan, Congo and Zambia.

India is ranked 135th on the latest index, not having moved for a year. More puzzlingly, India has not moved much in a decade and a half, through the glory years of GDP growth. In fact, it has dropped from 119th in 2010. India was at 127th in 2004. A Business Standard story reporting the index for 2004 noted that India’s “public expenditure in pre-primary and primary education has been nearly stagnant during 1990-2001".

The index measures life expectancy, education and income. If our national income is increasing, and it is, it becomes clear that what is holding India back on the index is health and “being knowledgeable". Indians can expect to live a decade less than the Chinese, and receive about half the amount of schooling. The Chinese are, of course, also at the cusp of being a high income nation.

The question is: Without boosting our health and education, is high national income possible? Our politicians believe so.

On a visit to the US last week, Union finance minister Arun Jaitley spoke on the subject: “Putting India back on track: A pathway to double-digit growth."

Back on track? When was India on track? Not in 2004. Not in 2010. Not today. And we have never hit double-digit growth. What do we need to do to achieve it?

A PTI report quoted Jaitley as saying the path to 10% growth is not impossible. He cited economic reforms and policy changes along with a good monsoon as the basis for his optimism. “This (10% growth rate) is reasonably possible. That is where India’s potential is."

But is it?

Has there ever been a case in history when a nation, leave alone the size of India, has achieved consistent high growth while being in the bottom 10 (by measure) of the medium HD index? We cannot expect to lift off or take off (or whatever current cliché is used to describe our growth) while carrying such a burden, but I have never heard finance ministers say such things. It is always about the next monsoon or the global sentiment or the price of oil.

Everything else in India, this seems to be the general assumption, is in place and slotted as potential, as Jaitley did in Washington, DC, and it’s not only about him. You would be hard-pressed to find a finance minister in any cabinet in the Union government of the last two decades talking differently.

The question is: Who will produce the goods and services that lead to world-beating growth? The answer cannot be a population that is in the doldrums when it comes to its human development.

Some will point out that many nations remain stagnant comparatively on the index over decades and that is true. However, the reality is that our current, stagnant state is so poor that it is frightening that we haven’t moved.

The World Bank’s very sharp country director for India, Onno Ruhl, was interviewed by The Indian Express a few days ago. He was asked how India’s social indicators compared to those of Africa’s. Ruhl replied: “Sadly, the short answer is not very favourable. There are two aspects. One, people always overestimate how rich India is. India is in the same per capita bracket as Nigeria, Ghana and Kenya. If you quiz most people on the Internet, they would say India is quite rich because of what you can see and the Mars satellite. But the truth is some of India’s human development indicators are very poor. The biggest ones are malnutrition and the resultant stunting—this absolutely must be a national priority to resolve. In the last year, stunting at age two has gone from 47 to 38 per cent if I am not mistaken. People say that is great, but I say that is horrible because 38 per cent of kids at two will never be productive in their life. The second one is sanitation. On that front, India fares worse than Bangladesh. I am glad the government understands it. Swachh Bharat is an ambitious undertaking. Sanitation is the only area where we can go to the government and say you can learn from Uganda, but do not insult it. In education, India has made major strides in terms of enrolment, not in terms of quality. There it does not fare that badly compared to Africa."

I have not read such a devastating couple of paragraphs on India in a very long time.

We have known for a couple of years now that even in some of the most economically progressive and advanced states of India, the human indicators have lagged GDP growth. Having middling or low indicators (compared to other Indian states) has not stopped Gujarat, for instance, from growing quickly in the last two decades.

This might encourage us to think that it will fall into place in time even nationally, and high growth will come purely from deregulation and governance. I would caution against such a reading. Gujarat has a set of things going for it, above all an entrepreneurial base, that many states do not have. Its success will not be easy to replicate nationally. Nor, and I hope I am wrong here, will even Gujarat be able to continue being a world-beating economy while dragging such a burden behind it.

A happy phase of growth on a very low per capita GDP base has led us to think we have the big things right and need only governmental tweaking and legislation to rapidly expand the economy.

That view in my opinion is fundamentally wrong.

Aakar Patel is executive director of Amnesty International India. The views expressed here are personal.

Also Read Aakar’s previous Lounge columns

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