TeaThe Narendra Modi government has set a target for the country to achieve the status of a “developed country” by 2047. In preliminary calculations, this seems a tall order, and one may wonder whether this is just another fantasy – like doubling farmers’ income by 2022, or manufacturing to 25 per cent of GDP, that too by 2022. or becoming a $5-trillion economy next year.
Furthermore, the government has not defined what it might mean to be a “developed” country, and there are no international benchmarks to apply.
However, various development indicators exist, which focus on income levels, health and education standards, quality of life (eg, access to electricity and safe drinking water), availability of work, poverty and inequality levels, technological achievements, etc. The initial impression is clear – that India is far below the required levels on such indicators. So the target set for the next quarter-century is ambitious, but what’s life without some ambition?
In fact, if one considers the arc, and especially the scale, from 1947 to 2047, getting there would be significant.
Can India make the grade? For starters, the country needs to increase its per capita income more than fivefold in 24 years, which calls for an annual growth of 7 percent. Since the country’s population will continue to grow, the GDP will have to grow at an even faster rate. It has so far proved elusive except in brief stretches. In fact, very few countries have sustained such rapid growth over such a long period of time, and India has yet to match it. On a realistic assessment, India will not be “high income” in 2047.
Achieving the “very high” human development category may be easier given the speed at which the country has improved its score on the Human Development Index over the past quarter-century. Maintaining that rate should help India improve its index score from the current 0.633 to a “very high” range of 0.800 by 2047.
Switching to the second parameter – the share of high-tech goods in a country’s exports of manufactured goods – India’s share is 10 per cent, almost at the same level as Brazil and Russia. The global average is 20 per cent and China’s figure is 30 per cent. (Pakistan has 1 percent!) In terms of research output, India’s total is growing rapidly so that it now ranks fourth by volume. But it ranks only ninth in terms of the number of citations to such research; China’s citation level is five times higher. Catching up to the average of developed countries on such indicators will be a challenge, even if progress has been made.
AS To track poverty numbers in an aspirational India, the “extreme poverty” benchmark of $2.15 per day, applied when India was a low-income country, is the lowest for a lower-middle-income country. Not fit what India has become.
The benchmark for such countries is $3.65 per person per day (about Rs 90 applying purchasing power parity, ie Rs 10,800 per month for a family of four). Accordingly, crores of people are poor today. The benchmark for upper-middle-income countries, when India gets there, will be even higher, at $6.85 a day.
Bear in mind that if India achieves “developed country” status by 2047, it will be far from unique. More than 80 countries (including territories) are already classified as high-income by the World Bank, while India is still lower-middle. Income. More than 65 countries are ranked by the United Nations Development Program as having achieved “very high” levels of human development; India is still in the “medium” category, and is far behind the “high” category. The country remains a long way away even from eradicating what is called multidimensional poverty.
So even though India is trying to climb the mountain of development, the truth is that the top of the mountain is already crowded. If it reaches there in 2047, India would have come too late. These realities should encourage the country to shed the arrogance it has already had. While the record for the past three decades is well above average, much tougher tasks await and India has to step up its game – unless we are dealing with just another chimera.
By special arrangement with Business Standard.
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