Saturday, 16 August 2014

Reading Dreze and Sen: 1 - India needs to strive for more than economic growth

There has been some slackening of the growth rate of India’s economy very recently (which is partly related to the global slump). But Dreze and Sen point out that even with its diminished growth rate India is still one of the fastest-growing economies of the world. This is something that we have to keep in mind – despite the hue and cry about an ‘economic slowdown’ in India, our growth rate is still not THAT bad. 
         But still, they agree that India should strive for higher, faster growth. This can be a huge source of strength for it as the fruits of economic growth can be used for the advancement of human lives.

Although agreeing that India has achieved a lot since Independence, both economically and socially, Dreze and Sen emphasise that there is scope for A WHOLE LOT MORE. There have been major shortcomings and breakdowns – even though the privileged as well as our media tends to overlook these. The neglect of these problems in public reasoning [say, in debates on news channels or in our general public consciousness] is harmful because in a democracy it is usually through such discussion and understanding that serious problems are addressed. Although we must celebrate India’s economic progress, one must also remember that its societal reach has been very very limited.

One serious issue is that income distribution in India has been getting more unequal in recent years – this is something we share with China. But China has witnessed a rapid rise in real wages from which Chinese working classes have benefitted. In contrast, India has had relative stagnant real wages.   

A second issue is that the public revenue generated by rapid economic growth has not been used to expand social and physical infrastructure in a determined and well-planned way. In this, India is far behind China.

Third, despite its economic growth, India continues to lack essential social services for a huge part of the population. Schooling, heath-care, provision of safe drinking water and drainage are some examples of crucial social services. 

Another problem is that while India has overtaken other countries in terms of its real income, it has been overtaken in terms of social indicators by many of these countries - even by some of its poorer neighbours! 
For example, India has caught up with China in terms of GDP growth but it lags far behind China in terms of longevity (how long people live), literacy, child nourishment and maternal mortality. In South Asia itself, a much poorer Bangladesh has overtaken it in terms of social indicators (such as life expectancy, immunization of children, infant mortality, child nourishment and girls’ schooling). Even Nepal is catching up with India (inspite of its GDP being just 1/3rd of India’s)! 20 years ago, India used to have the 2nd best social indicators among 6 South Asian Countries (i.e. among India, Pakistan, Bangladesh, Sri Lanka, Nepal and Bhutan) – now.. it’s the 2nd worst (ahead only of ‘problem-ridden Pakistan’)!  

So, while India has been climbing up the ladder of per capita income (average income of a person per year has been increasing), it has been slipping in terms of social indicators.

Economic growth generates income. But in India, the income generated by growth has been unequally shared (to put it simply, the rich get more than the poor). Moreover, the resources created have not been used to address the social deprivation of the poor and marginalized.

There is much work to be done – India has to make use of the fruits of economic growth a) to enhance the living conditions of the people and b) to reduce the massive inequalities in India’s economy and society.

Apart from that, India needs to address its far-reaching failure in governance and organization. One instance of this is the mismanagement of the power sector – most of us have suffered from India’s persistent power failures and some of us may know that 1/3rd of India’s population has no electricity at all! This is a massive failure (only 1% of China’s population suffers from this problem). But the sad state of the power sector is only part of the serious failure to provide good physical infrastructure. Similar deficiencies can be seen in water supply, drainage, garbage disposal, public transport, and so on.

So, Dreze and Sen conclude that while maintaining a consistently high growth rate is surely important, India needs to strive for something larger than that - It needs to utilise the fruits of its growth to address the disparities and deficiencies mentioned above.     

[The purpose of the ‘Reading Dreze and Sen’ series of blogs is to briefly summarise some of the arguments given by Jean Dreze and Amartya Sen in their book ‘An Uncertain Glory: India and its Contradictions’. The arguments are of the authors alone and the blogs are merely a recapitulation of them in as simple a way possible (the style is deliberately informal). The aim is to help myself to remember the details of these arguments (writing always helps!) but more importantly to hopefully trigger conversation and provoke contestation regarding the issues raised, even if on small forums like facebook :)]

No comments: