Jayachandran/Mint
Jayachandran/Mint

India’s vision 2020 meets the real world

Forecasts made in 2000 about India today reveal there have been gains, but the overall report card is poor

The year 2000 was fascinating. There was much excitement around the beginning of a new millennium, with many of us envisioning a technology-led future and a brave new world. The Millennium Bug was more than just the Y2K problem—it symbolized an enthusiasm to crack most of the persistent problems that the 20th century, with its enormous advancements in trade and economic growth, had not been able to solve. Spurred on by A.P.J. Abdul Kalam, who would go on to become President, the Planning Commission came up with an omnibus document that defined and articulated India’s vision 2020.

Twenty years later, it is time to see how the country has fared. What did the forecasts say then? Did we do enough to meet goals that we set out to achieve? Were we oblivious of the challenges to growth and development that would appear without warnings in the 21st century? What sectors of the development stage did India reach its potential and where did we fail in our tryst with destiny?

Growth and poverty

In 2000, India was being counted among the then-famous BRIC economies. Brazil, Russia, India and China were supposed to rapidly increase their dominance over the global economy. While Brazil and Russia disappointed Jim O’Neill, the Goldman Sachs economist who coined this term, China and India have indeed done well, possibly better by way of gross domestic product (GDP) growth than was forecasted.

A major share of manufacturing went to China, and India hoped to follow suit by increasing manufacturing’s share to 25% by 2022. This would add another 100 million jobs, it was predicted. However, manufacturing got stuck at 16.1% of GDP, within industry that accounts for 29% of GDP. Agriculture contributes 17% and a dominant services sector makes up the balance.

In India, the consensus at the turn of century was that annual GDP growth rate would be between 8.5% and 9% over the next 20 years. This would result in quadrupling of the real per capita income. Poverty would be completely eliminated. It was predicted that India would move from being a least developed country (LDC) to an upper-middle-income country. And that India’s rank in the World Bank’s classification of economies would go from 11th in 2000 to 4th in 2020.

On this front, India did move very fast, bringing millions of people out of poverty. It was no longer an LDC even by the end of the first decade of the millennium. However, this was not enough to reach the upper-income bracket where China and Brazil sit. India remains a lower-middle- income economy.

On poverty, according to the United Nations’ 2019 Multidimensional Poverty Index (MPI), India lifted 271 million people out of poverty between 2006 and 2016. This was the fastest reduction in the MPI values during the period, with strong improvements in areas such as assets, cooking fuel, sanitation and nutrition. Poverty could, however, not be eliminated, as envisioned 19 years ago. Estimates on the number of poor vary between 21% of population as per the 2011 Census and 3% as Brookings Institution’s recent calculations suggest.

Graphic: Paras Jain/Mint
Graphic: Paras Jain/Mint


Demographics and jobs

In the year 2000, it was projected that India’s population will continue to grow and will cross 1.3 billion by 2020. It already has, and the population division of the UN Department of Economic and Social Affairs estimates that India’s population will surpass China’s by 2027. It is also true that fertility rates have been declining rapidly, particularly in the south, and India’s population should stabilize by 2050.

Life expectancy that was 64 years in 2000 grew to 69 years in 2019, exactly the figure predicted. However, it compares poorly with Brazil and China, both at a little more than 75. The population of 60-plus citizens was expected to reach 120 million. It has reached 103 in 2016, and the number will only go up. Public infrastructure must improve to take care of the elderly now.

With 65% of the population in the working age group, India in 2000 knew that providing employment opportunities would be key to sustaining growth. The data on jobs is dismal indeed. The country has been seeing jobless growth for nearly two decades and now the employment data is ominous. The rate of unemployment is at a 45-year high, with the educated unemployment rate rising to more than 23%. Nearly 11 million youth lost their jobs due to demonetization in 2016 and the hurried goods and services tax implementation in 2017.

The vision of skilling 500 million people to feed into a growing economy’s staffing needs was sadly not realized. The percentage of skilled youth moved up marginally from 2% in 2000 to 4.4% by 2019. The pithy and evocative “Jobs for All" slogan articulated in 2000 remains a distant dream, receding further as automation, sectoral shifts and poor educational outcomes hamper any scope for improvement.

Education

The education story is a mixed one. Enrolments have gone up significantly, with big moneys spent on midday meal schemes, Sarva Shiksha Abhiyan and village school buildings. The recent All India Survey on Higher Education 2018-19 gives extensive data on students and their journey through school. What is really a matter of concern is that the journey from primary school to college is rough and despite nearly complete enrolment at the primary level, very few youth reach college.

There is a sharp dichotomy when it comes to vulnerable sections of society. For example, the Scheduled Tribes (STs) comprise 5.5% of the total number of students in colleges compared to 8% share in the population. The same problem exists among teachers too—only 2.3% of the teachers are STs compared to 8.5% share of the population. Both these categories continue to be seriously under-represented despite legally mandated reservations.

The report then gives an update on higher education. There are 993 universities today compared to the 642 universities in 2011-12 and 229 in 1998. The National Knowledge Commission had estimated that the country would require at least 1,500 universities by 2020 to provide education to its youth, so we are still more than 500 universities short.

However, the quality of higher education is abysmal. The government is not helping either by interfering with the functioning of our higher educational institutions.

Only one-fourth of our youth in the 18-24 age group is going to college and university. The higher equation system awards a little less than 10 million degrees every year and 65% of these go to undergraduate students. Most of the students with such degrees learn very little in terms of knowledge, life skills or any other skills relevant to employability.

India produces less than 200,000 MPhil/PhD degree holders annually who presumably have some research skills. It’s no wonder that the level of teaching in our universities and the quality of research that comes out are of very low quality.

Hunger and malnutrition

According to the Food and Agriculture Organization, in 1992, there were 240 million undernourished people in India. In 2012, the figure has gone down to 217 million, a decline of more than 9%. However, the vision of “Food for All" and “Zero Malnourishment" has been a dismal failure. India tops the world hunger chart with around 200 million citizens sleeping hungry each night.

There’s more: 38% of children in 2016 below 5 years were stunted—that is, they have low height for age. The ratio is 31% for children living in urban areas and 41% in rural areas. Similarly, 21% of India’s children suffer from wasting—that is, they have low weight for height. Only three other countries in the world have wasting above 20%—Djibouti, Sri Lanka and South Sudan.

The Global Hunger Index (GHI) is a tool designed to comprehensively measure and track hunger at the global, regional, and national levels. In the 2019 GHI, India ranks 102nd out of 117 qualifying countries. With a score of 30.3, India suffers from a serious level of hunger. In the 2019 GHI, Bangladesh at 88 and Pakistan at 94 perform better than India. Sri Lanka at 66 and Nepal at 73 are way better too. The only country in the region that performs worse than India is Afghanistan, at rank 108.

How has India got left behind in this race? For a democratic country whose economy has been growing at fast rates, India’s performance is perplexing and worrisome.

Health

Health for All", we promised. But with huge supply-side problems, this vision is as far from being reached. With 17.5% of the world’s population, Indians account for 20% of the global burden of disease. The private sector caters to 75% of outpatient care and 60% of inpatient care. An estimated 60 million Indians are pushed into poverty every year because they are forced to spend nearly half their annual household income on medical needs.

A much quoted Lancet study shows that our doctor shortages are mind-boggling. There is much regional variation—there is one government hospital bed for every 614 people in Goa compared to only one for 8,789 people in Bihar. Some 6 out of 10 hospitals in our poor states do not provide intensive care, and a fourth of them have abysmal sanitation and drainage facilities. The government’s flagship programme Ayushman Bharat suffers from this gross undersupply of doctors even as it increases demand substantially.

In conclusion

According to the first-ever scientific study ranking countries by their levels of human capital, we find that India ranks 158th in the world for its investments in education and healthcare. Sudan (ranked 157th) is ahead of India and Namibia (ranked 159th) is behind in the list. The US is ranked 27th, while China is at 44th. The simple fact which emerges is that expenditure on human development must rise substantially. Universal healthcare, easy access to quality education, elimination of hunger, provision of sanitation infrastructure, pollution control and putting an end to malnutrition are critical to take India into the next stage of development.

One leading indicator of growth and development in any economy is urbanization. India’s population remains persistently rural, particularly in the east. With its 35% urban population today, India is way behind most developed countries where the share is upwards of 50%.

Hostility towards migrants, slowdown in interstate movement and the shrinkage of urban jobs has hampered labour mobility considerably. The $5 trillion economy that defines Prime Minister Narendra Modi’s vision for 2024 will need a far more inclusive agenda, where sharp gender gaps, lack of access to the digital world and poor quality infrastructure are tackled immediately.

India continues to be an economy with great potential, but will need concerted efforts in the next 20 years if it must go on to become a developed country by 2040.

Amir Ullah Khan teaches economic policy at the Indian School of Business and the Nalsar University of Law.

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