In­di­ans will be less poor, bet­ter ed­u­cated and health­ier in 2032. But will dis­par­i­ties end? No.

India Today - - SIGNATURE - Bibek Debroy The au­thor is a pro­fes­sor at the Cen­tre for Pol­icy Re­search, Delhi

I should first tell you who I am. I am 10 years old. My name is Anita and I live in Delhi. My school­teacher sad­dled me with a project that made me strug­gle. She wanted me to write an essay on what the In­dian econ­omy will look like 20 years from to­day, that is, in 2032. Economists don’t know that and she expected a 10- year- old to write an essay. I cheated and asked my mother, who is an econ­o­mist. She said, “Use the Net. Search and you shall find. That’s what most economists also do.” Here is what I found. My mother only helped me un­der­stand some con­cepts. The rest was float­ing around.

First, dif­fer­ent coun­tries have in­comes in dif­fer­ent cur­ren­cies. To make these com­pa­ra­ble, they are con­verted to US dol­lars and this can be done in two ways, us­ing of­fi­cial ex­change rates, or us­ing PPP ( pur­chas­ing power par­ity) ex­change rates. As In­dia de­vel­ops, the ru­pee will ap­pre­ci­ate against the dol­lar. But be­yond that, economists don’t know how ex­change rates will be­have. Nor do they know much about in­fla­tion. There­fore, they state ev­ery­thing in to­day’s dol­lars.

In 2032, In­dia will be the third largest econ­omy in the world, with a to­tal in­come of $ 7 tril­lion ( it is $ 2 tril­lion to­day). But China ( No. 1) and USA ( No. 2) will be a long dis­tance ahead, though if the ru­pee ap­pre­ci­ates, In­dia’s in­come will be more than $ 7 tril­lion. Sec­ond, In­dia’s pop­u­la­tion will just cross 1.5 bil­lion and over­take China’s. There­fore, $ 7 tril­lion will be spread over many more peo­ple. Third, In­dia’s per capita in­come will be around $ 4,500 ( it

IN 2032, IN­DIA WILL BE THE THIRD LARGEST econ­omy in the world, with a to­tal in­come of $ 7 tril­lion. But China and USA will be a long dis­tance ahead, though if the ru­pee ap­pre­ci­ates, In­dia’s in­come will be more than $ 7 tril­lion.

is $ 1,400 now). I asked my mother whether that will make In­dia a de­vel­oped econ­omy. She said “de­vel­oped” is an im­pre­cise term and In­dia cer­tainly won’t be “de­vel­oped” by 2032. It will still re­main rel­a­tively poor, though much less so. It will just move from the lower mid­dle in­come to the up­per mid­dle in­come cat­e­gory. This didn’t much sense un­til I checked that Jor­dan and Turk­menistan have that kind of per capita in­come to­day. I hadn’t re­alised that these coun­tries are so much richer than In­dia. Nor had I re­alised that in 2032, on an av­er­age, In­dia will still be poorer than what China is to­day.

Fourth, there will be many dif­fer­ences within In­dia and to­day’s gaps won’t be closed. The stan­dard of liv­ing ( per capita in­come) in Chandi­garh, Goa, Puducherry or Delhi will be like that in de­vel­oped coun­tries to­day. But in Jhark­hand, it will be like that in Bangladesh to­day. There will still be a lot of poverty in Ch­hat­tis­garh, Jhark­hand and Odisha. Fifth, there is some­thing called a poverty line, a min­i­mum level of in­come re­quired to sus­tain life. To­day, around 30 per cent ( dif­fer­ent peo­ple give dif­fer­ent fig­ures) of In­di­ans are be­low the poverty line. In 2032, it will be less than 10 per cent. So In­di­ans will be less poor, bet­ter ed­u­cated and health­ier. Sixth,

many more In­di­ans will live in ur­ban ar­eas and agri­cul­ture’s share in na­tional in­come will be around 8 per cent. Some peo­ple will still work in agri­cul­ture. But many more will work in in­dus­try and ser­vices. Al­most 40 per cent of In­di­ans will live in cities, and there will be around 70 cities with pop­u­la­tions of more than one mil­lion. Delhi, where I live, will have a pop­u­la­tion of 40 mil­lion. I can’t imag­ine what Delhi will look like then. I pre­sume Delhi will ex­pand and ex­tend to neigh­bour­ing states like Ut­tar Pradesh, Ra­jasthan and Haryana. Roads, cars and trans­port will im­prove so much that one will be able to reach Agra, Jaipur or Chandi­garh in two hours. I think with those high- speed trains, one might be able to reach Mum­bai in four hours too.

Seventh, what will hap­pen to slums, the poor and prices? I see peo­ple fight­ing for wa­ter even to­day. Many of them don’t have ac­cess to elec­tric­ity. There may be bet­ter schools ( per­haps even vir­tual) and bet­ter health­care. The in­fant mor­tal­ity rate will be­come 15 per 1,000. Ev­ery child will be in­oc­u­lated and there will be no births at home. But I think peo­ple will continue to fight over wa­ter and the weather will be­come more vari­able. Are we go­ing to see a Delhi where peak sum­mer tem­per­a­tures cross 50 º C? All of us will have UID and the gov­ern­ment will know who the poor are, those who need to be sub­sidised. But ev­ery­one else must pay and the way I see it, ev­ery item of food will cost Rs 350 per kg. Power will cost Rs 15 per unit. Though our in­comes will be higher, ev­ery­thing will be more ex­pen­sive. Be­cause I go to a good school and will prob­a­bly go on to study in the US, I am sure I will get a good job when I re­turn. But I am not sure ev­ery­one’s go­ing to be that lucky. There will be many of us around, all get­ting into the job mar­ket and there may not be enough jobs to go around. ( My mother con­fused me by say­ing that ev­ery­one will get jobs. It is just that salaries won’t in­crease that much, on an av­er­age.) But the ques­tion I am ask­ing is dif­fer­ent. Let’s as­sume that the poor will be fine, be­cause the gov­ern­ment will sub­sidise them. Let’s as­sume that the rich will be fine, be­cause they will get good jobs with good salaries. But will those in the mid­dle be able to pay Rs 350 per kg for ev­ery item of food and Rs 15 per unit for power? My mother asked me not to worry. She said that real in­come growth is al­ways pos­i­tive, more than in­fla­tion.

Eighth, my friend, Adit, read this and asked about fam­ily life and ca­reer. I haven’t writ­ten about it be­cause I don’t know. I know I will prob­a­bly work in a dif­fer­ent city, not Delhi, and peo­ple will move about much more and not stay in their place of birth. I know jobs will be un­cer­tain and I will keep chang­ing my em­ployer. I know I will marry late, prob­a­bly never. I know Adit will also find it dif­fi­cult to marry. But that’s be­cause he comes from a part of In­dia where they have killed all the women. I know I will see my par­ents not more than once a year. If I live in any of the met­ros, I know it will be very dif­fi­cult to get a do­mes­tic help. But then, I have seen my par­ents go­ing nuts try­ing to deal with var­i­ous pub­lic au­thor­i­ties. For ex­am­ple, there are so many things they still have to do phys­i­cally. I sus­pect much of that will go dig­i­tal and vir­tual. Given a choice be­tween liv­ing the lives my par­ents lead and the one I am likely to, I will choose my own. I think I will have many more rea­sons to be proud of be­ing an In­dian than my par­ents do. And if I marry, I hope my daugh­ter will say the same thing when she is asked to write a sim­i­lar essay.

( This “let­ter” is fic­tional)


SU­BIR HALDER / www. in­di­a­to­day­im­ages. com


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