The paradox of India's growth

The paradox of India's growth

There is a growing suspicion among an increasing body of economists about taking gross domestic product (GDP) as the true yardstick for development of a nation. Conventional measures of economic success do not take sufficient stock of the social and environmental challenges of the 21st century, they say. GDP, since the 1930s, which calculates the total final market value of all goods and services produced in a country over a set period, has been the main economic indicator used internationally to assess wealth and it is beginning to be discredited on the plea that the welfare of a nation cannot be inferred from a measurement of national income.
The inadequacy of the GDP has been underlined yet again in the poor ranking of India — 134 among 182 on the human development index of the UNDP, an index which goes beyond the GDP of a nation to measure the general well being of people under a host of parameters such as poverty levels, literacy and gender-related issues.

The fundamental weakness of the GDP is that it “cannot distinguish between activities that have a negative and a positive impact on the well-being” of society. India has been buoyed up on a surging GDP, refusing to accept that all is not well.

Uneven distribution
The World Bank report however took respectful note of India’s growing economic might and increasing GDP but added that increasing equality and distribution of wealth is the need of the hour. At a time of global recession, when the growth rate in the USA is zero, India is about to clock a 6 per cent growth rate this year, as a result of cumulative buoyancy in the services sector, manufactures, foreign exchange and stock market.

Some five years ago, the much-hyped BRIC (Brazil, Russia, India, China) report by Goldman Sachs predicted that in dollar terms, India would be the country with the third largest gross domestic product in the world in the next 50 years, which means that India would overtake countries like Japan, Germany and the UK in terms of its GDP. While it is taken as matter of relish, GDP does not take into account important aspects such as leisure time, environmental quality, freedom, or social justice.
That’s the paradox in India, high on GDP growth rate but faring poorly in the human development index. The ranking clearly shows India has slipped in comparative terms in ensuring a better quality of life for its citizens as in the previous index, published for 2007 and 2008 together, it ranked 128, while the position the year before was 126.

As migration comes under the banner of ‘Overcoming Barriers: Human Mobility and Development’ in the latest HDI, development-induced displacement in India in infrastructure projects is the new menace, resulting not only in asset and job losses but also in the breakdown of social and food security, credit and labour exchange networks, social capital and kinship ties.

What gives a special tangle to the tale of economic development in India is that in the recent wrangle over the cause of the rise of naxalite violence, lack of development has been cited as the main reason. Union home ministry has urged civil society to ponder over how Maoist violence has not only ‘pushed back’ the government’s development efforts but also affected the poor on many fronts.

Development vs violence
The convergent view that does the rounds is that it is years of underdevelopment and state negligence that are the root causes of the Maoist violence to prosper, that is, the Maoist movement thrived on legitimate grievances unaddressed by the state. Trouble is, both versions hold true of the Indian context. “Develop first and then we lay down arms” runs contrary to “Lay down arms so that we can develop” rigmarole while the message for the government must be to incentivise the poorer chunks consisting mostly the tribal population.

Yes poverty, in sheer statistical terms, is on the decline, compared to what the scenario was, say, in the 1960s or the 1970s. But if one sees the demography of less developed states, some of which are prone to naxalite violence, poverty has been seen to be concentrated in the four least developed states in terms of average Gross State Domestic Product (GSDP) — Uttar Pradesh, Bihar, Madhya Pradesh, and Orissa.

A UNICEF report says that two-thirds of all maternal deaths in the country come from nine states: Uttar Pradesh, Uttarakhand, Bihar, Jharkhand, Orissa, Madhya Pradesh, Chhattisgarh, Rajasthan and Assam. Even as urban India witnesses economic progress, technological leap and the software boom, rural India continues to struggle for the fulfilment of basic needs.

Get a round-up of the day's top stories in your inbox

Check out all newsletters

Get a round-up of the day's top stories in your inbox