Claims about a fast-paced growth for India are often taken with a pinch of salt. While these claims are partly true in certain sectors of the economy and in relation to infrastructure development, the flip side is often downplayed. Noted economist and former RBI governor Raghuram Rajan, who has a ringside view of the growth process in India, has agreed that India’s economic growth now at six per cent might rise by two per cent. But, he also made it clear, in a widely reported speech in Zurich, that India would still require some 15 to 30 years of steady growth to catch up with the US and China. In other words, his stress is that India would remain content with, at best, the “third largest economy” tag – over and above its present status as the “fourth largest”- after the US, China and Germany. He has an eminent point.
India overtook the UK to reach the present status in 2022 and outwit Japan this year. India might be able to overtake Germany too, whose economy, like Japan, is of 4 trillion, and become the “third largest” by 2028. But, China with a $17 trillion economy and the US with a $27 trillion economy are economic behemoths and unassailable. China’s great leap forward was made possible by a tweaking of its economic policy, since the 1980s, when it embraced principles of a capitalist market economy. Since the turn of the century, its growth was unprecedented. Now, its economy and resultant military might are four times those of India’s. India and China were on par in both these respects some 25 years ago. China’s focused attention to economic growth has been possible due to the continuation of a well-oiled governance system overseen by the Communist Party. There are no flip-flops, unlike in India where leaders and policies could change frequently. The democratic system lacks the cutting edge; and more so with the presence of leaders who fail to act firm when the need arises. A weak-kneed or ‘please-all’ attitude that defines democracy now has its flaws. India’s infamous Hindu Rate of Growth is by its very nature a slow growth. A large mass of human energy is wasted in the absence of a governmental initiative. Manmohan Singh with his strong grasp of economic fundamentals helped the nation reach a growth rate of nine plus, which however slowed down during his last phase in governance. Under the Modi dispensation, it fell further but the national economy is still weathering odds, unlike the weakening of economies of the neighbouring nations. China’s economy too faced serious odds after the Covid-19 spell.
Claims about India’s fast-paced growth are tamed by the ground-level realities. In terms of per capita income, India is at the lowest depth of around 140 in the comity of nations. The larger size of India’s economy is juxtaposed with the scenario of poverty rampant across states, with some 80 per cent of the population living on BPL and other subsidies and freebies rolled out by governments. Salvation for the poor, disadvantaged sections is more like a mirage.
