Growth? What Growth?

Lop-sided growth

If food, primary education and primary healthcare are the issues which go unanswered, what ‘growth’ are we talking about?

For the past several years Indian economy has been growing at about 8.5 per cent. Even the current projected rate of growth for 2012, despite global recessionary trends, has been put at over 7 per cent. Businessmen and elite have flourished. More businesses have blossomed and more opportunities have opened up for the elite. Frankly, even for several of the working ‘middle’ class population, the last decade and a half -- post-liberalisation -- has been economically beneficial. For all those of us who are on this gravy train, it has been good enough to put us in a slumber and therefore not see the ominous signs. Has it been good for those of our citizens who are at the lower end of the economic spectrum? Has the so-called growth touched the poor? The answer is a clear ‘no’. 

More than a quarter of the entire world’s hungry people are in India. We have 230 million hungry people. 2011 Global Hunger Index (GHI) Report places India at a high 15th rank in ‘hunger’. It is also significant to note that between years 1996 and 2011, the hunger index actually went up for only India, Burundi and Democratic Republic of Congo. So, the ‘hunger’ has increased over the last 15 years – years which have seen rapid economic ‘growth’. The World Bank estimates that the percentage of underweight children in sub-Saharan Africa is 24 per cent, while India has almost twice the amount at 47 per cent. About 72 per cent of our infants are anaemic. While this news should really be alarming, we seem to be gloating over our economic marvel. 

India Faking It

Dazzling images do not a shining nation make

Each year, since then, India has had a major visual presence at Davos through cleverly pitched campaigns designed by highly creative advertising agencies.

The India visible in the branding images primarily exists in the consciousness of the elite. It is a world of neat shopping malls, expensive branded products, happy, prosperous consumers, skilled scientists and engineers, white coats, headphones, smooth highways, high rise buildings, glass facades and green grass that paves one's vision. The images could be from anywhere in the world, while the Indian setting is presented through cultural icons such as bindis, colourfully decorated elephants, Gandhiji's spectacles and Taj Mahal. In short, India is transformed into a global place while still retaining its cultural authenticity and ethnic appeal.

While this vision is a powerful tool to attract investors and tourists, it is also its biggest weakness. The images conjure a world that does not really exist outside the limits of the visual frames. Absent from the frames is the “other” India — the poor, the untouchables, the minorities, and all that is un-beautiful — the ruptured body of the nation that has not only failed to “catch up” with the progress, but in fact is seen as holding the nation back in its journey towards prosperity and global power.

It is not uncommon to hear stories of shock and disappointment upon arrival from the very members of the privileged global class that the Indian state so wants to attract. 

...

As the novelty of dazzling image campaigns levels out, India might need to rework its agenda — to focus on the actual production of a prosperous and equitable nation, rather than producing merely images of it.

Nothing's Trickling Down

Alok Ray, former professor of economics at IIM, Calcutta, writes in DH: Where is inclusiveness?.  He notes India's growth is not all that inclusive.  We lag behind in adult literacy, life expectancy, malnutrition, number of people below the international poverty line, to take just a few indicators.  Job growth seems to have slowed down post-liberalisation:  

One area of major concern is that post-liberalisation, job creation which is a major mechanism of inclusion of more people in economic prosperity, has been slowing down. Employment growth fell sharply in the post-reform years, from 2.6 per cent per annum over 1983-1993 to 1.2 per cent over 1993-2000.

The fall in employment growth rate was specially concentrated in organised sectors (particularly in the public sector). This trend has been reversed to some extent as the latest available National Sample Survey (NSS) data show employment growth during the period 2000-05 was 2.7 per cent per annum. But, then again, the growth in jobs has been mostly concentrated (about 87 per cent) in the unorganised sector.

In terms of equality we seem to be doing well, which is quite surprising.  It does look like inequality is rising (see the graph in this wikipedia article).  And then there is this factoid: The total value of the assets of the country's five billionaires equalled those of the bottom 300 million people (link).  C P Chandrasekhar sums it up concisely, as he writes about a well-ignored recent study of Indian poverty, in The Hindu:

Finally, it has been known that once we went beyond pure income measures of poverty and looked at other indicators of deprivation, not only was the incidence of deprivation substantial in terms of indicators varying from literacy to child malnutrition, but the progress in alleviating certain forms of deprivation had slowed during the high growth years. The problem is not just that India has significantly underperformed when addressing poverty and deprivation over 60-plus years of post-Independence development, but that progress has slowed in precisely those years when the surpluses available to tackle this problem has increased substantially. The problem is not inadequate growth, but one of institutional inadequacy. It is also one of an increasing reluctance of the elite to address those inadequacies and, therefore, of the failure of what is undisputedly one of the most remarkable experiments with parliamentary democracy.

Relatedly : Inclusive Growth, Lip Service Only