A lot has been said about India recently, but as someone said (I think it was Amartya Sen) - "Whatever is true about India, is also not true". For every rich, there is someone desperately poor. I recently read an article written by Pankaj Mishra in London yesterday and published in New York Times. I think it sums up some things with which I completely agree. I strive to summarize what he says and add in some of my thoughts as well.
The latest issues of many American magazines have presented India as a rising economy and there have been cover stories about the rise of India. Many politicians and leading business people in India have celebrated as Lakshmi Mittal has finally managed to take over the steel company Arcelor, and the general euphoria has been summed up as the harbinger of things to come when India would be in primacy all around the globe. But this would only make sense if you do not realize that Lakshmi Mittal has hardly any ties with India. He only announced the plans to open his first plan in India today, and he has barely made any investments there.
However, many Indians are convinced that this will be an Indian century. There are some very good reasons for that. There has been some very tangible progress. The road network has been thoroughly overhalled, the metro has been built in Delhi, the software and outsourcing industry has done very well, and employed a lot of people. But a sign of the reality is the tremendous infrastructure problem in Bangalore, which boasts to be India's silicon valley. Nevertheless, the confidence of some of these people which are the elite in India has managed to infect the news media, and they have been selling these success stories.
But does India represent any capitalist success? We have had many victories by the communists and the recent large scale losses by the stock market. This week India's prime minister, Manmohan Singh, sadly indicated that only a small minority of Indians will be able to enjoy "Western standards of living and high consumption."
India has traditionally been depicted in America and the west as a poor, third world country, with lots of problems of violence, terrorism, and lack of safety. It has been said that there is lots of red-tape and bureaucracy, and it is difficult to get anything done. It has been perceived to be friendly to the former USSR. But suddenly the perception seems to have changed. It has been portrayed not only as an economic powerhouse but also a strategic ally in South Asia. The reasons for that are clear, and the USA wants to use India as a counterweight to China. But I do not want to focus on that here. What we should focus on are real facts about the state of affairs in India. Indeed, there has been much progress. As I mentioned earlier, India has emerged as a world leader in information technology and business outsourcing, with an average growth of about 6 percent a year. There has been sort of revolution in urban areas, with people willing to spend a lot of money, and some aspects of life, with malls selling luxury items, mobile telephones in every hand, and cinema multiplexes everywhere have begun to resemble the west. But this common, business-centric view of India suppresses more facts than it reveals. The real facts on the ground are not very glorious. In fact, they are deplorable. The article by Pankaj points what is common knowledge but is not discussed. Here are the real facts:
1. India's nominal GDP per capita is only around $720 (134th in the world), below many Sub-Saharan African countries (although it can be said that these numbers are skewed by the 1 billion plus population - in total nominal GDP, India is 12th in the world). For comparison, Norway is ranked 25th in the world in total nominal GDP but 2nd in the world in nominal GDP per capita. A more useful figure is GDP derived from Purchasing Power Parity (PPP) calculations. This takes into account relative cost of living, and inflation rates between countries, rather than just using exchange rates, which have the potential to distort the real differences in income (Wikipedia). According to figures, India stands 4th in the world in GDP (PPP), while Norway drops to 42nd due to very high costs of living. However, in GDP (PPP) per capita, Norway is still number 2 in the world with a figure of $42,364 (only less than Luxembourg and somewhat more than the United States) while India stands at number 122 with $3344 which is still among the poorest in the world.
2. In UN's Human Development Index, India ranks 33rd in Asia, and 127th in the world, which is just two rungs above Burma, and much much below Cuba and Mexico. Around 40% of Indians live on less than a dollar a day!
3. India is not good at all for mothers and children. We have all heard stories about female foeticide, and how drastically sex ratios have been skewed in some states. In one village in Punjab, there has been no female birth in years! Now, I will present some statistics from the State of the World's Mothers (SOWM) report in 2004 which paints a sad picture. First figures about young mothers: 6% of 15 year old girls in India is a mother or currently pregnant. Roughly 1 in 10 babies born to teen mothers die in their first year. Overall, India is the 32nd worst country in the world in overall early motherhood risk. Only 43% of the births are attended by trained personnel. 50% of pregnant women have anemia, and 67 out of every 1000 infants dies. 16% of children under age of 5 suffer from severe malnutrition (around 50% are affected in some way and there is little sign that the economic growth is changing that). 2.5 million Indian children die annually, accounting for one out of every five child deaths worldwide; and facilities for primary education have collapsed in large parts of the country. Overall, it is ranked 86 out of 119 countries in the Mother's index and 110 out of 157 countries in the child index.
4. Thousands of farmers have committed suicide recently due to abject poverty and the inability to repay small loans, with ridiculous rates of interest.
5. In index of economic freedom rankings, India is 121 out of 157 countries. For a discussion of what it implies, please see: http://en.wikipedia.org/wiki/Index_of_Economic_Freedom
Large majority of people have generally been left behind by the economic gains. The BJP lost power in the last elections due to the fact that their "India Shining" campaign was deemed a failure by the poor people. There have been many maoist insurgencies in several parts of India, which have caught hapless people in the middle. Only a small fraction of people has been employed in this so called new economy and joblessness is very prevalent. There have been a few signs (although it has been changing recently, especially in Tamil Nadu) of a large scale manufacturing boom as seen in China. Hopefully "Made in India" can compete with "Made in China" and large scale employment can be provided to people. But it can be said that many serious problems confront India. They are unlikely to be solved as long as the wealthy, both inside and outside the country, choose to believe their own complacent myths.
