Developing a ‘developed’ dream

India’s relative fast pace of economic growth raises the question: when will India become a developed country? In 2002, then Prime Minister Atal Bihari Vajpayee had declared that India would be a developed nation by 2020. This was reiterated by then President A P J Abdul Kalam in several speeches. On one occasion in March 2003, he said “We should not allow any religion or any individual fanatic to endanger our nation”. He said his goal of a developed India by 2020 was based on a detailed action plan in areas like agriculture, education, healthcare, infrastructure and information technology.

In 1998, Kalam and his colleague and scientist Y S Rajan wrote a book which described a vision for India to become a developed nation. More recently, Prime Minister Modi declared in his 2022 Independence Day speech that we should take a pledge to make India a developed country by 2047, the 100th year of our independence. From the days of Vajpayee’s speech, the goal has shifted by another 27 years.

It is worth examining this question, of not just whether India can become a developed nation by 2047, but more fundamentally, what exactly is our definition of this concept. As a slogan and as a grand vision, it is easy to articulate and capture the imagination of the people. It is a term used quite liberally in conversations. The World Bank has been using the terms “developed” and “developing” countries almost since its inception. Most analysts and economists, especially those working for foreign banks, use acronyms like DC – Developed Country -- and EME -- Emerging Market Economies. So just by constant usage these terms have gained acceptance.

One obvious definition, also used by the World Bank, is in terms of per capita income, measured in dollars. India is currently the fifth largest economy in terms of GDP and will become the fourth largest in a year or two, after it overtakes Germany. But in terms of per capita income, it is still ranked below 130. India’s per capita income – the average annual income of an Indian citizen -- is about $2,200, whereas the world average is above $12,000. The average of the OECD group of 15 rich and developed countries is $42,500. The Euro area average is roughly the same. North America is at $68,000 per capita. This is the most recent data available from the World Bank. The average for South Asia is the same as India, because it has a big weight (and incidentally, the Bangladeshi per capita income is now ahead of India’s).

The numbers look different if the dollar income is adjusted for purchasing power parity, i.e., to account for the fact that the domestic currency, such as the rupee, in India’s case, has much greater purchasing power than implied by the exchange rate. Which is to say, one dollar in India will get you much more than one dollar in America. Hence $2,200 in India is actually close to $7,000 in purchasing power parity terms. Even then, India’s rank in per capita income is 128 in the world, and 31 among Asian nations.

So, from here, reaching a developed nation category with a per capita income of more than (say) $30,000 is a tall order, if it has to be achieved in the next 25 years. This question will not go away. It has been around since Vajpayee’s speech, or even earlier. In 2008, at a big gathering, Amartya Sen was asked when he thought India would reach developed country status. This was when India was clocking 9% growth.

He gave a classic Amartya Sen response. The Nobel laureate said he had absolutely no interest in answering such a question!

The important point is that even if we are a fast-growing economy and manage to cross, say, $10,000 in per capita income, will it mean a “developed country” experience for all Indians? Because, after all, the per capita income is simply a national average, and does not tell us anything about how that income is distributed across all sections of society. Currently, India is among the fastest growing economies, and yet we are providing free food rations to 810 million people. This is due to concerns about their food security. The free food also adds to their “income” although it is not in the form of cash, but in kind.

Here are three metrics that are measurable and will really mean that India and her people have reached ‘developed country’ status. The first is the availability of clean drinking water from a tap in the house. There is the national Jal Jeevan mission, which is focused on this. Out of 190 million rural households, roughly 30 million have got tap connections. But mind you, this is not merely about a tap, but the availability of potable, clean water – which should reflect in much less water-borne diseases and arsenic poisoning.

The second metric is about the quality of the local school, be it municipal school in cities, or a village panchayat school. In a developed nation, parents will happily choose the nearest public school for their kids. But the current reality is that even people living in slums prefer to send their kids to a private school and engage high-cost tuitions. Even teachers who teach in municipal or village schools prefer to send their own kids to other private schools.

The third litmus test of being a developed nation is the use of public transport. A developed country is not one in which poor people can afford cars, but where even the rich travel in public transport like buses, trains and metros. This happens when the services are of high quality, punctual, reliable, and affordable. Some big cities in developed countries have made buses totally free. And the ridership has gone up.

Thus, from these three ‘litmus tests’, we can measure our progress toward becoming a developed nation. Of course, there are many other metrics, too, such as air quality, worker productivity, health status, elderly care, forest cover, lowering the carbon footprint, biodiversity, and so on. But the three ‘litmus test’ goals can suffice.

(The writer is a noted economist) (Syndicate: The Billion Press)