INDIA AT 70: ACHIEVEMENTS AND FAILURES
When India stepped into democracy on the principle of universal adult franchise after August 15, 1947, there were many who had predicted gloom and doom for the country. One of the fears was that India would ‘collapse into regional components’. There were also predictions of an unstable India where ‘centrifugal forces will prevail’, bringing anarchy or fascism. None of those fears and predictions has come true over the last 70 years. Between 1951-52 and 2014, 16 parliamentary elections have been held. Each election has been a mammoth exercise in which people, irrespective of caste, class, religion and education attainment, have voted to elect their representatives.
Deepening of democracy, success of parliamentary form of government, rule of law and people’s faith in democratic process and institutions are the biggest achievements of independent India which have not only proved many sceptics wrong but surprised many. The uniqueness of this achievement is the fact that every change of government since independence has been only through the ballot box as India been able to keep out the armed forces from the democratic process. Even some of the Western countries cannot lay claim to this achievement. In the last 70 years India has come a long way: from a poor country that ranked low on many key development and performance parameters to a developing economy that’s currently growing at a faster rate than the developed world.
India of 2017 is vastly different from India of 1947. As sixth largest economy in the world by nominal GDP and third largest in terms of purchasing power parity (PPP), India’s gross national income (GNI) at constant prices has increased more than 35 times from Rs 2.92 lakh crore in 1950-51 to 120 lakh crore in 2015-16. At current prices, the GNI stands at 150.83 lakh crore. The per capita income at current prices for 2016-17 is estimated at Rs.1.03 lakh, against Rs. 274 in 1950-51. Called the country of illiterates that would be ruled by semi-illiterate parliamentarians, India’s literacy rate at the time of independence was a mere 18 per cent; today it is 74 per cent. Food grain production in 1950-51 was 50.8 million tonnes; it is estimated to be 272 million tonnes in 2016-17. Life expectancy in 1947 was 32, now it is 68.
From a mixed economy in the 1950s to 1980s that grew at the rate of 3.5 to 4 per cent, India’s transition from semi-socialist to market economy has unleashed faster growth and development in the last 25 years. The opening up of economy in 1991 and series of subsequent reforms since then have not only lifted million out of poverty but expanded the market for goods and services, delivered financial prosperity and higher purchasing power to millions of middle class citizens. For instance, the size of the middle class in the 80s was a paltry 10 million; in 1996 it was 25 million. Today it is in excess of 250 million which makes India a robust domestic consumption market economy. It is no wonder that multinationals, venture capitalists, private equities and foreign participatory investors are betting high on India’s growth story. It is also not a surprise that today India is also an attractive destination for foreign investment.
But data tells only half the story; the other half comes from state of the nation. Middle class alone does not make the whole of India. Despite a strong consuming middle class, India is also a home to over 300 million poor people devoid of basic human needs. A 7 per cent growth rate in a slow-growth world is pretty good on the face of it but there are serious problems with India’s growth narrative. Given the enormous size of India’s population and more than 20 per cent people still below poverty line, low level of national income and per capita income have hurt overall rate of economic growth. Not only per capita income is low but vast inequalities in distribution of income and wealth has made India a country of mass poverty. Low growth of the industrial and manufacturing sectors has resulted in over-dependence on agriculture as a dominant sector for employment. Almost 45 per cent of population is engaged in agriculture, a low productive sector, which contributes only 15 per cent to the national income.
Massive unemployment, scarcity of capital and low rate of capital formation and under-developed infrastructure are the other characteristics of Indian economy which make India one of the poorest nations in the world. It is important to mention here that much of India’s growth over the last few decades came from services-led expansion which saw both wages and employment rise. The expansion of India’s middle class is a result of the services-led growth which contributed greatly to GDP growth but employs less than 30 per cent of the population. Hence the ‘India shinning’ projections by the government, based on revised base year and upgraded accounting indicators, are not the real pointers of Indian people’s economic growth and prosperity. Jobless growth, steady decline in Gross Value Addition, decline in industrial growth and falling credit growth are a cause of concern for the government. India ranks poorly at 131 out of 188 nations in The United Nation’s Human Development Index, which measures levels of healthcare, education and standard of living.
If the economy is not glowing, the state of the nation is also beset with problems and worries on political and social fronts as well. The virtuous talk of unity in diversity and secularism has been replaced by the new narrative of Hindutva and ultra nationalism. If India has to progress, deliver inclusive growth and lift many more millions out of poverty, the government needs to prioritise on a comprehensive educational policy and healthcare system to fast track the country’s growth. The nation suffers from grossly inadequate infrastructure and deep skills deficit. Without jobs the demographic dividend of youthful population can turn into a massive social and economic problem. India doesn’t need nationalistic rhetoric and mere promises of prosperity. It needs real and faster development and a society that’s just, peaceful and equal, that the country’s leaders promised at the time of independence. Otherwise, despite the boom years India will continue to remain a poor country.
is vastly different from India of 1947. As sixth largest economy in the world by nominal GDP and third largest in terms of purchasing power parity (PPP), India’s gross national income (GNI) at constant prices has increased more than 35 times from Rs 2.92 lakh crore in 1950-51 to 120 lakh crore in 2015-16. At current prices, the GNI stands at 150.83 lakh crore.