India through the Eyes of World Bank and Time Magazine
Two recent reports – one by the World Bank and the other in Time Magazine – attempt to draw a profile of a land that can fox the profoundest of pundits in search of parameters for assessing the countryâ€™s economic health now, as also in the foreseeable future.
1) World Development Indicators (WDI), published annually by the World Bank, states that India’s per capita income is just a shade higher than that of sub-Saharan Africa, and about one-sixth that of Latin America. And goes on to add that 35% of India’s population lives on less than $1 a day, which is comparable to Bangladesh’s 36% and much worse than Pakistan’s 17% and Sri Lanka’s 6%.
2) While the Time magazine goes lyrical: “India Awakens…fueled by high-octane growth, the world’s largest democracy is becoming a global power. Why the world will never be the same. Now here comes the elephant.
“India’s economy is growing more than 8% a year, and the country is modernizing so fast that old friends are bewildered by the changes that occurred between visits.”
Time adds: “Last year per capita income in India was $3,300; in China it was $6,800. Prosperity and progress haven’t touched many of the nearly 650,000 villages where more than two-thirds of India’s population lives. Backbreaking, empty-stomach poverty, which China has been tackling successfully for decades, is still all too common in India.”
Prof Kaushik Basu, of Cornell University, makes a valiant attempt to understand India’s economic report card. “So what India has excelled in is sustained growth. It is this that has given rise to hope. And, combined with the vibrancy of democracy and the successes of higher education in India, this has led some commentators to argue that its future augurs even better than China’s.
“One worrying feature that could cause political instability and jeopardize this bullish forecast – and much of South Asia shares this anxiety – is the problem of poverty and inequality. (And not just nukes in India and Pakistan – my comments)
“Much has been written about this but again some statistical fact checking sheds new light. Inequality in South Asia is large but not as large as in much of the rest of the world. Even smaller inequality means much greater hardship for the poor in South Asia
“Let us consider the ratio of income earned by a country’s richest 10% and the poorest 10%. The ratio for India is 7.3. That is, the richest 10% of the population is a little over seven times as rich as the poorest 10%.
“All South Asian nations have similar ratios. This is a lot of inequality but not as much as in China which has a ratio of 18.4 or the United States 15.7.
“The problem with South Asia is that, being poor, even this smaller inequality means much greater hardship for the poor and this is what is feeding various kinds of rebellious movements in the region. This will be one of the most formidable challenges confronting India over the next decade if it is to live up to its promise.”
And now it is Time‘s turn: â€œBackbreaking, empty-stomach poverty, which China has been tackling successfully for decades, is still all too common in India. Education for women–the key driver of China’s rise to become the workshop of the world–lags terribly in India.
“The nation has more people with HIV/AIDS than any other in the world, but until recently the Indian government was in a disgraceful state of denial about the epidemic. Transportation networks and electrical grids, which are crucial to industrial development and job creation, are so dilapidated that it will take many years to modernize them.
â€œYet the litany of India’s comparative shortcomings omits a fundamental truth: China started first. China’s key economic reforms took shape in the late 1970s, India’s not until the early 1990s. But India is younger and freer than China.
“Many of its companies are already innovative world beaters. India is playing catch-up, for sure, but it has the skills, the people and the sort of hustle and dynamism that Americans respect, to do so. It deserves the new notice it has got in the U.S. We’re all about to discover: this elephant can dance.”