ndia has two goals in front of it—a $5-trillion economy and Viksit Bharat, where it is aspired to become a developed economy by 2047. This would also mean reaching this threshold by the 100th anniversary of independence. While talking of these targets everywhere is now very much in vogue, with all future planning being associated with Viksit Bharat, have we stopped to think beyond this number? This is where Prosenjit Datta brings out a remarkable book, titled Will India Get Rich Before It Turns 100?
This is important, as we need to distinguish between a number and the quality of the same. Let us look at the number first. Datta goes through a series of combinations of growth numbers that will make this possible, and depending on how we choose to define the growth rate for GDP or gross national income in nominal terms and population, one can reach the magic figure of high per capita income, which will be close to around $14,000 as it stands today.
However, over the next 20 years, the author explains, the World Bank (which does broad classification of countries based on income) will shift this goalpost ahead and the number can be higher. And, more importantly, if one does similar extrapolations for various countries, such an achievement looks possible at some time or the other. Therefore, the number per se, though important, may hold for several other nations too, which could get there faster.
What is important is the quality of this per capita income. This is where the title comes in where the author speaks of the country becoming rich when we attain this per capita income mark, which would be a futuristic truism. He is less sanguine than other economists on poverty and argues that irrespective of the gauge used on this factor, India has a large number of poor. Here he uses the human development index to prove the point.
Now, often this index is countered as being biased, but a walk along the streets of our metro cities shows that poverty is quite rampant and a serious issue. He focuses on two major issues that we need to address in a big way, which are education and health. This is where the country needs to do more in order to become rich, as there is not much being done, especially at the lower end of the income scale.
This gets linked then to the issue of employment, where he is quite critical of the country’s performance. The author wades through the data as well as approaches of the government survey called the ‘periodic labour force survey’ and that brought out by the CMIE. The conclusions of both the surveys are dissimilar with supporters on each side calling the other optimistic or pessimistic. But any which way, the proof would finally be in how this pyramid of employment evolves over time to support growth.
This is where education comes in, as mere enrolments to the employee’s provident fund could be misleading if the income earned is low due to low skilled jobs being pursued. In fact, he is quite frank while questioning the quality of the large number of engineering and business administration schools and institutes that have mushroomed but are unable to create professionals who can be readily absorbed in the higher end of jobs.
His answer to the question on whether manufacturing is a way out for creating jobs and pushing growth is that it would definitely help. There are several areas he points out that provide a plethora of opportunities, which can be leveraged. These include electronics and pharma, which he says are the rising stars. He is quite dismissive of the PLI scheme as it involves a subsidy to industry. Instead, getting more electronic chip manufacturers, for instance, into the country as a long-term policy will help to reduce cost of inputs for Indian manufacturers. Hence what is important is a more favourable policy framework to prop up manufacturing output and not be restricted to subsidies, which can work only to an extent.
The book’s various chapters highlight issues that would be integral to the process of becoming rich while becoming developed. An area that is probably of concern all across the globe is disruption caused by pandemics and climate change. This is something that is serious as it can set back the growth process. This can have an impact on agricultural production, which is already visible when it comes to changing season patterns, especially the monsoons.
The other area of worry would be AI. Is it good or bad for a country like ours? Universally it is accepted that we will live with AI in every sphere of our life given the investment that is being made in all countries. The problem for us is that India is a labour-surplus economy and unbridled use of AI and machine learning can have an impact on employment. At a different level, the author points out to the strike in Hollywood when the use of Gen AI became widespread. Are these impact points exaggerated or real? The author pitches in the affirmative and feels that on the whole we will benefit from Gen AI research. But inequality and unemployment can get worse.
Datta in this book points to several areas that need to be addressed by the government as we embark on this long journey. Given that it is still two decades away, there is plenty of time to have a strategy in place. But clearly there is need to start work immediately and cover as much as possible to realise this dream.
Will India Get Rich Before It Turns 100? A Reality Check
Prosenjit Datta
Aleph Book Company
Pp 138, Rs 499
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