Is The Big Fat India Growth Story Really a Hoax?

“India is not, as people keep calling it, an underdeveloped country, but rather, in the context of its history and cultural heritage, a highly developed one in an advanced state of decay.” When Shashi Tharoor had, according to some, enough ‘hubris’ to spell out the afore-mentioned words in the media, with a piercing stream of nonchalance in his diction, the entire Indian polity went into complete disarray within a fraction of a second. In fact, the workers of all the political factions in India were equally generous in handing out the choicest expletives to him, irrespective of their political affiliation. On the other hand, several BJP-centric political ‘pundits’ known to have, over the years, developed a liking for assembling on an hour-long news show (describing it as a one-man vaudeville wouldn’t hurt as well) at 10 PM everyday to throw a barrage of somewhat refined yet harshly acerbic remarks on a hapless, relatively low-card Congress party worker who would pose as a sheep ready to be mauled, with the host of this talk-show-cum-news-show-cum-boxing-match getting the honour of pulling the axe each and every day. I guess you have guessed the show but that’s not important. What’s important is that when the BJP defeated the Congress in the 2014 Indian General Elections, these same BJP-lenient experts came on the show to strum their lofty praises upon Narendra Modi and speak about how this victory would finally ensure in ushering in the “achhe din” for each and every section of our diverse nation. The only caveat was that they used a very erroneous metric to substantiate their claim: the Indian Gross Domestic Product (GDP), which had grown by 6.5% last quarter (end of the UPA government) and was tipped to grow at more than 8% in the next quarter with the arrival of vivacious positivity associated with a Modi government. At this stage, what we should really ask is whether economic growth alone is sufficient to translate into ameliorating the lives of the common people? I hope to be able to debunk this myth to some extent and throw light upon whether we can really emerge from the “advanced state of decay” we are in right now.   '

A still from ‘Slumdog Millionaire’ which depicts the abject poverty in which several sections of the Indian society lives

To initiate a piece-by-piece analysis, I shall take the help of a story with its origins close to India, related to the Iwakura Mission – a Japanese diplomatic journey all around the world in 1871. In brief, the mission comprised of an optimal sample of the Japanese population of those times, i.e. individuals covering all brackets of age, gender, caste, etc. They set sail to traverse the globe so as to end Japan’s long-drawn period of complete isolation from the Western land. The value derived from the passengers upon the mission’s return is considered by many to be a complete game-changer in Japanese history given that this planted the seed for the unhinged economic and social growth exhibited by Japan in the years to come. The most profound take-away from this story for me personally would be the fact that a five-year old girl, aboard the mission, recommended to make elementary education  free for all irrespective of gender. It’s not surprising that Japan has been lauded time and again in several international forums for the sheer brilliance of their paradigmatic education system with minimal disparity with respect to gender. Even now, when we revisit the Japan’s success story, we do realize even without a shade of doubt that it was social development which laid the foundation for speedy economic growth and not vice versa. Given India’s fascination for seeing itself highly placed in several quantitative rank lists based on numerical metrics like GDP or GNP, we have quite conveniently managed to overlook India’s progress on more tangible aspects such as progress of the quality of life, determined by standard social indicators. Given that poverty was mostly concentrated in the sub-Saharan African region and South Asia in the past, South Asia (including India) has done quite well economically compared to sub-Saharan Africa with the per capita income of the latter being a third less than the former’s. Sadly, the mapping for social indicators, sans average life expectancy, is not commensurate with the per capita income gap as most of these indicators are roughly same for both the regions with South Asia taking a beating as far as the nutrition level of children goes. In fact, an interesting point which should be brought to the fore out here is that even when India was growing at a CAGR of 6% annually, and was lambasted by friends and foes alike for growing at an utterly ‘dismal’ rate, it was still growing much faster than most nations in this world. What India really couldn’t fill up was an ostensibly wide gap in her value proposition chain: leveraging upon the country’s economic growth to improve the country’s living standards. A study conducted in 2011 even went on to posit that despite having GDP per capita levels substantially lower than that of India, countries like Vietnam and Nicaragua clearly outperform us in several critical social indicators. Now let us get a glimpse of what the factors responsible for India lagging behind in the social indicators repeatedly mentioned explicitly (or alluded to) thus far really are. The most significant ones used as metrics for comparison by most international agencies are different mortality rates, morbidity, fertility rates, malnutrition levels, extent of literacy (especially among females) and immunization levels. Quite intuitively, one can easily conclude that the factors responsible for India’s disproportionate growth, as inferred from different parameters, are assignable to a wide plethora of factors which can be broadly classified into the three categories: state failure, cultural drivers and income levels. Although it would be quite unfair to consider each of the social indicators in isolation and assign a particular cause-response relationship to each of them, we can quite safely conclude that India’s slow progress in factors such as literacy rates and fertility levels are mostly driven by cultural factors with state failure playing a major role as well given that it is the state’s responsibility to change the social consensus pertaining to such delicate issues by aptly imparting proper education to the masses. On the other hand, low levels of nutrition and high mortality rates can be quite easily attributed to the disproportionate distribution of income in the Indian population. A combination of the three afore-mentioned factors are responsible for India’s disproportionate social development rate with respect to its economic growth, so much so that India currently exhibits the highest morbidity in this world. All is not dreary though in the scenario at hand given that states like Kerala, Himachal Pradesh, Tamil Nadu, Punjab and Haryana have shown remarkable progress on the social front as well and can quite rightfully hold their own in an international forum in terms of human development index. What’s quite conspicuous is the common thread connecting these three states: high literacy rates. While Kerala’s prowess in terms of high literacy rates is quite well documented, Himachal Pradesh’s ascendance to the fore too was primarily driven by its highly intensive initiative to proliferate elementary education to even the remotest sections of its society. Tamil Nadu also did something similar by reinforcing education through the introduction of a mid-day meal program which would provide individuals the requisite incentive to attend school. Thus, it is quite clear that states such as these and other small countries, which have been traditionally perceived to be economically weak, have exhibited higher levels of human development because of their ability to provide essential public services universally. These efforts have been fuelled by the efforts of a robust administration, with a view to mitigate social inequality as much as possible, and are reflective of people’s active participation in democratic politics. Thus, other states can learn from these paradigmatic examples and make an earnest effort to learn from their successes and failures so as to ensure that India eventually reaches a stage wherein its social development is commensurate with its economic growth.   Author Biography: Srinjoy Ganguly is a first year MBA student at IIM Ahmedabad. He will be interning in the Securities division of Goldman Sachs in the upcoming summer. Rank 9 in WBJEE, school topper in Class XII, School Marshall and IBM Campus Ambassador (JU), Srinjoy has co-authored 8 international IEEE/Springer conference papers. A voracious reader, he has written articles for several websites, been quoted for his views on the National Budget by the Telegraph and loves researching extensively about old Hindi music.