The release of the second part of the Economic Survey for 2016-17 — the part which contains all those interminable tables and graphs which our honourable MPs usually tended to skip over when the Survey used to be presented as a single document — has once again shifted the current topic of public discussion away from the showdown of the strongmen in Gujarat to more fundamental questions like roti, kapda, makaan and whether achhe din are finally around the corner or not.
This is all to the good. As a nation, we tend to outrage over inconsequential things like whether Amazon Canada is selling slippers with pictures of Hindu gods on them, and tend to skim over the really life-altering ones like demonetisation and GST. So, some talk about the economy is good.
The gloomy growth horizon
The consensus of first-cut opinion on the Survey-II’s findings is that the news is not good. There are dark clouds looming over the growth horizon, and not of the good, rain-bearing type. From a GDP growth rate projection of 6.75-7.5% in February (during the Budget), the Survey says meeting the higher end of the band is pretty much not possible, with the “balance of risks” having shifted to the downside.
Amongst the risks, the Survey points out the growing crisis in Indian farming, with rising agrarian distress and unremunerative prices for almost all non-cereal crops; the balance sheet risks of the rising tide of farm loan waivers in States; India’s growing private sector balance sheet crisis; and the real threat of deflation.
To me though, there are other takeaways from the kind of overall view of an economy the size and complexity of India’s that a document like the Economic Survey provides, takeaways which should form the basis for detailed reflection on where we are as an economy, how far we have travelled towards the many goals that we have set for ourselves, and more importantly, picking and prioritising which problems we can, and should, solve first.
The first is that we are a pretty large economy, whether in rupee or dollar terms. Gross National Income grew from a mere Rs. 10,360 crore in 1950-51 to a staggering Rs. 1,49,94,109 crore in 2016-17. When we cheer 70 years of Independence come August 15, this is a number we can certainly cheer to. Per capita income grew from just Rs. 254 in 1950-51 (current prices) to Rs. 1,03,219 in 2016-17. This is the first time in our history that (even if notionally, and on paper), every single Indian is a lakhpati.
The size and financial strength of the government, too, has grown in proportion. The first interim Budget of India estimated total government revenues at just Rs. 171.5 crore. In 2016-17, the total budgetary outlay of the Central and State governments and Union Territories together amounted to Rs. 38,38,558 crore. That is nearly $608 billion. In a single year.
That still pales in comparison to the trillion dollar-plus budgets of the U.S. and China, but six hundred billion dollars is not chump change. There are a lot of problems that you can solve by spending that kind of money every year. The question is, are we solving the right problems?
Lagging behind smaller nations
We may be among the fastest growing economies in the world, we may be militarily strong enough to rattle sabres at China, but for a vast number of our people, the growth or development or strength is yet to touch them in any meaningful way. India ranks 131 out of 188 countries in the Human Development Index. The Survey admits: “In comparison to other nations in the BRICS grouping, India has the lowest rank… The Life Expectancy at Birth (LEB) is also lower than that of Bangladesh, Brazil, China, and Russia.”
It is now 42 years since India launched the Integrated Child Development Services, the world’s largest early childhood intervention programme. During this period, India’s Infant Mortality Rate dropped 68% — but at 40.5/1,000, is still much higher than neighbouring Bangladesh, Pakistan or Nepal and well shy of the 29 deaths per 1,000 live births target which was meant to be achieved by 2015.
Now this is a problem we can fix with $600 billion, with enough and more left over to tackle another big problem: education. The mean years of schooling for India are the lowest in comparison to other BRICS nations. According to a Pratham report, about 42% of children in Class 3 are able to read at Class 1 level in 2016. “The fact that the ASER report compares the skills of Standard 3 children in Standard 1 levels is an example of the state of the learning outcomes of the primary education,” the Survey admits.
I could go on, but the point is that we are in the big league now and have the technology and the money to solve problems which even little league nations have cracked. What we need is a clear focus on what to solve — and steadfast execution.