India’s efforts to race in the league of the
economically developed and politically matured countries of the world look
somewhat premature. There is a lot of hype mostly emerging from relatively
higher levels of growth rates during the last decade and half; as this happened
due to low absolute levels to begin with. It is the large population count, a
basic multiplier that leads to grand GDP estimates, real opulence that could
generate sustained demand, promote economic activity and spiral up further
growth is limited. At best the consumer-heroes of India are the middle and
lower middle class who must engage the market to meet their basic needs such as
food, energy, transportation, education, health and technological essentials.
While affordability and appropriate technology is still the issue, the
relatively higher inflation is leading unexpected race to achieve affordable
living.
A considerable social and ideological baggage has
sprung-up since the BJP assumed power which potentially can pull down and derail
the economic growth and social development prospects of India. Note that India
has come a long way overcoming the drag of the socialistic ideology, since
about 1985 the GDP grew to increasingly higher levels continuing until now.
Although the recent global downturn has only marginally depressed India’s GDP
growth, it will be the only large economy in the globe expected to register a
relatively high growth of around 6-7 percent during 2016 and 2017. Such a
higher rate of growth if sustained for a decade and more, can then enable India
register a place in the ‘new league of nations’ that will propel global
economic development during the best part of 21st century.
Now let us ponder over the conditions that are
necessary for India to register a sustained higher growth rate during the
immediate to medium term. Firstly, India’s natural advantage of harvesting and
exploiting vast natural resources will yield higher growth only when it has
access to investible funds and appropriate (green) technology. Both these
inputs are available to India from abroad through the process of foreign direct
(FDI) and foreign institutional (FII) investments. Secondly, the relative
advantage of having a youthful population which will continue for at least
another two to three decades can sustain only when they are educated and
skilled appropriately; which in tandem with increasing investments get
worthwhile rates of return through enhanced productivity in essential sectors
of the economy such as manufacturing, services and agriculture. Lastly but not the least, India must exhibit
social cohesion and societal peace in the manner that it becomes the preferred
destination for foreign investors and technological flows assisting the economy
to progress through improved financial efficiency and reduced cost of
production. The structure of modern
labour supply in India is uniquely lopsided favouring the high castes who are
socially and economically better-off, keeping away large proportions of
Scheduled Castes and Tribes, the Muslims and selected ‘other backward classes’ from the modern labour market. This scenario
needs to be calibrated towards socially inclusive labor market, which amounts to
no less than a paradigm shift.
Recent interferences by the ultra right-wing groups
who fantasise India to be a Hindu state often identify themselves as a form of
social-civil society have thrown off-gear the policy frameworks, legal and
civic institutions regulating economic and social domains of millions of
citizens. They are able to effect policy reversals in selected states and even
at the centre, such as withdrawal of quota-reservations to Muslims (a case in
Maharashtra), banning the culling and consumption of livestock and so on. Even
many compelling legal cases with respect to police excesses and motivated
political threats are being withdrawn. There are changes and revisions being
made in school curriculums promoting right wing Hindutva ideology. The
scientific temper among the students and the population at large is being
challenged in a manner that unsubstantiated beliefs are used as citations and
theories to the dismay of modern thinkers, practitioners of reason and science.
Establishing links between religion and levels of
GDP across the nation is taboo. It is instructive, however, to learn that,
unlike the Christians, the Muslims and the Buddhists who constitute much of the
population of the globe and spread around a large number of countries across
the continents; the Hindu religion is confined within shores of India from
three sides and the imposing Himalayas in its north. Note also that over 95% of the Hindus live in
India and only small numbers in Nepal, Bangladesh and Pakistan; all these
countries have registered low levels of per capita GDP of less-than USD 1500,
India being on the top.
Over 61 per cent of the Buddhists on the other hand
domicile in countries which have high levels of GDP including Japan, South
Korea and China. Incidentally it is a
matter of historical fact that Buddhism emerged in the Indian sub-continent yet
it did not survive on these lands to the extent that only about two percent of
India’s population is Buddhists. Similarly, practically all Christians with the
exception of Congo and Ethiopia (about 124 million out of 1.5 billion) live in
countries with very high levels of GDP, such as the USA, most of European
nations, Brazil, Mexico and Russia. Even
over 55% of the Muslims live in countries which have relatively higher per
capita GDP although the most numerous of the Muslims live in India, Pakistan
and Bangladesh with meagre GDP. This simple association between religion and
GDP summarizes the broad parameters of religiosity and culture and its
influence on the economy and Hindu-radical groups need be better informed about
this association.
On another plain, it took a President of another
country - the USA to preach lessons on diversity, tolerance and creation of equal
opportunity during his visit to New Delhi in January 2015. Mr. Obama even
invoked Mahatma Gandhi, the icon of religious tolerance during the ‘63nd annual national prayer breakfast’ speech in Washington D.
C, to point out that ‘looking at what is happening in India even Gandhi would
have ashamed’. Politically though, at
the moment in India, the presence of minorities especially the Muslims are of
no significance excepting as a historical fact. They often are of entertainment
value for the general masses and not welcome co-patriots. However, the Muslims constitute the backbone
for a number of traditional manufacturing; the structure and growth of modern
industry especially in the areas of textiles, construction, leather, garments,
gems and jewellery and iron and steel and have been based on the artisanal
skills they carry to this day. A recent estimate undertaken by this author
suggests the Muslim labour force contributes relatively higher value added
compared to all other socio-religious categories at all levels of education
excepting the topmost which is affected by labour market and employment
distortions caused by quota system.
The state governments in India wield a substantial
independent power in many areas of governance especially those affecting the
basic needs and human development. The public police are implemented mostly
through state bureaucracy the solutions for the social and also many economic
issues have to be found at the local level. It is in this context that India
and its states need to establish institutional arrangements to ‘equal
opportunity a cherish goal and institutional mechanism to be found and
executed. Prudent economic and social policies both at the national and state
levels can yield higher economic growth lets India falls again in the trap of
the so called ‘Hindu (Low) Rate of Growth’.
