Open Forum

New Delhi, 28 October 2020 

India Vs Others

GOVT MUST BE RESPONSIVE

By Dhurjati Mukherjee

Notwithstanding a recent report indicating India shall emerge as the 4th largest economy by 2030 and the 3rd largest by 2050, there is no reason to be enamoured given the country’s large population. It doesn’t in any way indicate that the per capita earning of majority of the population would show an upward trend or the widening inequality would narrow down in the coming years. 

The report published in the Lancet journal took 2017 as the year base, when India was the 7^th largest economy in the world. Currently, India is at fifth spot followed by France and the United Kingdom and by 2050 will be the 3^rd after the United States and China. It studied working-age population trends of the various countries and calculated the GDP based on the data-driven scenarios.

Even though economic activities are picking up, both in the industrial and agricultural sectors – the GDP growth in the second quarter may be around a negative 8 per cent, which may get reduced in the remaining two quarters. After two months of prediction by international agencies that GDP growth for the current fiscal would be a negative 8.5 to 12 per cent, the Reserve Bank of India finally stated that growth would be around -9.5 per cent in 2020-21, proving that economists in the apex bank hadn’t envisaged the enormity of the crisis and predict accordingly.

However, what is more depressing is the prediction that India’s per capita GDP is projected to shrink 10.3% March-end 2021 while that of Bangladesh is expected to grow 3.8%. In absolute numbers, this means India’s GDP is likely to be $1877, the lowest in four years, while that of Bangladesh will be $1888. In India, exports have declined as also savings and investments and while it is not worse off than its eastern neighbour on these two counts, Bangladesh is projected to fare better than India in 2022 and 2023.

According to an IMF report, India will be third poorest country in South Asia after Pakistan and Nepal. Even Bangladesh, Bhutan, Sri Lanka and the Maldives are expected to be ahead of India. As per human development indicators like health outcomes and gender development index, Bangladesh has been doing better than India for some years now. One may refer here to the case of Vietnam where the share of the population living in poverty is unusually low and the quality of infrastructure unusually high, even compared to India. Moreover, the ratio of people living on less than $2 a day has fallen from 60 per cent to less than 6 per cent, leaving virtually no one behind, according to the IMF.

Equally startling is the Global Hunger Index (GHI) 2020 where India is ranked at 94 among 107 countries and continues to be in the ‘serious’ hunger category though it has made some progress, particularly since the enactment of the National Food Security Act. Every other country in the sub-continent fared better than India. Neighbours -- Bangladesh, Myanmar and Pakistan too were in the ‘serious’ category but ranked higher than India. While Bangladesh ranked 75, Myanmar and Pakistan were in the 78th and 88th position respectively. However, Nepal and Sri Lanka’s performance was much better and their ranks were 73rd and 64th respectively and were in the ‘moderate’ category, the report stated.

If the services sector had opened up, this negative trend may have been wiped off. As is well known, travel and tourism sectors have still not reached normal levels as also entertainment and real estate. The share of services in GDP being around 55 per cent, the revival of the above sectors may take time and perhaps till mid-2021. However, this is essential at this stage for the economy to revive and jobs to be generated. 

In the meantime, the lifting of the lockdown has helped industry to a great extent. But sales have yet to pick up at pre-Covid levels. Consumers are still wary of spending until the situation abates, wage cuts are reversed and employment rises again. In the external front, imports have been reduced while exports showed an upward trend. The entire situation is not quite encouraging and obviously time for full revival may be another six months or so.

The pandemic affected not just the economy but social sectors too and individual and community welfare. The economic pitiable condition as also wrong strategies adopted by successive governments has impacted tackling of the pandemic effectively as health infrastructure in the country is very poor, even compared to the developing countries 

In sum, notwithstanding the pandemic, it all boils down to overall poor governance, inefficient performance and an alleged corrupt system. As generally agreed, the State continued to lag in education, health and jobs. Also the problems of law and order and corruption, which were already severe in previous Congress regimes, continued to fester, if not worsen. The overall situation in the country, judged from the economic, political or social perspectives is worse than Bangladesh or Vietnam, not to speak of emerging economies like South Africa or Brazil. 

Besides, the present political leadership particularly lacks clear direction and sincerity in reaching out to the disadvantaged sections of society. Professionalism too seems absent in the government’s functioning as the top brass of leadership seeks to take overall control of the reins.   

The challenge therefore, at this juncture, is between a poor performing, ‘autocratic’ government system, with leaders taking recourse to jargons and false promises but acting in a unique manner to befool the masses and a disorganised Opposition unable to mobilise the people against wanton economic and social injustice perpetrated on society. Though many intellectuals, activists and even retired bureaucrats have protested against various policies of the government, those at the helm of the ruling party know pretty well that they can win over the masses by harping on religion and other histrionics.  

Additionally, alertness and awareness levels are very low. The educated youth steer clear from politics and national political parties don’t encourage being questioned and opposed about wrong policies, strategies and programmes. Both social and economic degeneration of the country has set in and only a new thinking and approach can transform the conditions of the poor and marginalised, whose pathetic situation finds manifestation in various reports.  

The chances of revival are not in tune with expectations, with situation deteriorating steadily. However, it needs to be clarified that revival or transformation does not just mean an increase in GDP but per capita income growth of the poor, the EWS and the low income groups. The impression that the present government is far from evolving an effective pro-people strategy and finding ways and means to increase their incomes, is gaining ground. 

Besides, the ‘repressive’ attitude against dissent and control of institutions needs to change with a decentralised approach, so very essential in a democratic polity. A responsive attitude would augur well in tackling current socio-economic problems and benefit the masses.---INFA

(Copyright, India News & Feature Alliance)