India behind Bangladesh?

                               

Will Bangladesh beat India in 2020? Yes, says an IMF prediction in the Per Capita Income (PCP) contest.  Bangladesh at US$1888 is set to beat India struggling at US$1877, by the end of 2020! Sri Lanka ($3700), Vietnam ($3500), Indonesia ($4000) and Thailand ($7300) are all much ahead of India. We are no match to the Asian giant China ($10,839).

What is painful to observe is that the PCP during 1990 (the period around which India embraced economic reforms), of India ($385) was ahead of Bangladesh ($329) and even China ($349)!

China growth story is unprecedented.  Strong leadership, non-democratic and authoritarian, liberal economic reforms since 1980 resulting in huge capital inflow from foreign countries, migrating labour from agriculture to services and industries, huge investment in infra and education and focus on export-oriented growth have all pushed China to the status of world's economic superpower.

But the success story of Bangladesh is baffling us! Bangladesh economic reforms have even attracted industrialists from India to shift their bases.  Aided by the power of cheap labour, Bangladesh has beaten India in the garment sector, cornering the export market spread over US and Europe. But many consider comparing Bangladesh with India is not appropriate, as the GDP of that country at about $ 347 billions is no where near India's GDP of  $2,650 billions.  But it's time India recalls the contest between hare and the tortoise! Certainly there is no room for complacence.  

No doubt, in GDP terms India has now become the 6th largest economy in the world leaving behind France. But during last 3 decades of reforms, India has witnessed a skewed economic growth, wherein 75% of wealth is in the hands of just 10% of the population.  Also in recent years 75% of wealth generated are being pocketed by just 1% of the population! This factor must be accounted while assessing the actual level of 'per capita income' of our average citizens, which may be far below the exalted claim of US $1,888. Still about 75 million Indians are struggling with extreme poverty.  

The news from Global Hunger Index 2020 also is a matter of concern, ranking India at 94 among 107 countries, far below our poor neighbors including Pak (88), Nepal (73), Bangladesh (75), Sri Lanka (64) and Myanmar (78). India's child care as revealed by the our ranks of wasting (low weight) and stunting (low height) among children below 5 years, also is abysmal. But I have my own doubts about the authenticity of these assessments.  With almost all state governments extending free food grains to poor families, situation can't be this bad. 

I may eat overnight left over rice, but not our house maid. I feel happy when she disdainfully refuses.

 

Many economists say that India's first four decades of freedom was wasted by placing it in ICU of public sector for too long. Reforms launched from 1991 has helped in loosening the shackles.  But India still suffers from lack of reforms and clarity about its ways and means. 

The rise of Modiji during 2014 had generated great hopes.  Good efforts are also visible by way of banking and tax reforms, land reforms, labour reforms, education sector reforms, farm sector reforms and so on. Investment in developing infra and education are also noteworthy.  But the growth figures as revealed since 2014 don't reveal any great strides, in spite of tall claims! If 'diversity' is India's strength, it's its weakness also! Vote bank politics is another folly which is defeating India.  Immature behaviour of political parties in opposing everything that the ruling party does is also not helping the cause. Our hostile neighbours are always a cause of worry, demanding a big share of our time, energy and money. There are natural challenges like inconsistent monsoon, floods, drought and cyclone too.

Some gains made in the recent past are substantially washed away by the corona pandemic. It has taken away the livelihoods of millions of poor people including street vendors, small businessmen, auto and taxi-drivers, MSME workers etc. Thanks to some sincere efforts, there are signs of recovery in the last couple of months, by way of good performance of our agri sector, continued FDI inflows, enhanced auto and tractor sales and better performance of the manufacturing sector. But God forbid, the fear of a looming second wave of the pandemic is threatening to spell doom for our economy. 

Let us remain optimistic. Covid vaccine may arrive assuring us safe dawn of a good new year 2021. Still we are the third largest economy in the world in terms of 'purchase power parity (PPP).' We have strong and stable Governments, both at the Centre and the States. We are an young country with a huge population of skilled and unskilled labour forces. Let us keep our hopes of becoming the five trillion economy by 2024.

-0-0-0-0-