Rich India : Will India Become A Wealthy Nation By 2047 ? (From Left to Right) Jayati Ghosh, Montek Singh Ahluwalia, N. Ravi, Sanjay Kaul, T.N, Ninan, in conversation with Raghuvir Srinivasan at The Hindu Lit for Life festival 2024, in Chennai on January 26, 2024. | Photo Credit: B. Jothi Ramalingam

In the first session of The Hindu Lit Fest 2024, N. Ravi, Chairman of Kasturi and Sons Limited; Jayati Ghosh, Professor of Economics at the University of Massachusetts Amherst; Montek Singh Ahluwalia, former Deputy Chairman of the Planning Commission; Sanjay Kaul, development policy analyst and former IAS officer; and T.N. Ninan, Chairman of Business Standard, discussed how India can become a rich nation. Raghuvir Srinivasan, Editor, The Hindu businessline, moderated the session, titled, ‘Rich India: Will India become a wealthy nation by 2047?’.

Mr. Ravi began the session by explaining the two schools of thought on how the present government has managed the economy. He said, “Economists are as divided as politicians on how the government has managed the economy.” While the government argues that “Nehruvian socialism had left the country with a growth rate of 3% for years,” critics question the competence of the current government, especially the “lack of economists of international standing in the government compared to previous regimes”.

He noted that while the government stressed its numerous welfare programmes, thrust on capital expenditure, increasing digital payments, housing and sanitation schemes, the increasing number of bank accounts, and reforms, such as GST, as indicators of a good economy, critics point out the problems of unemployment, malnourishment, deep structural problems such as the growing fiscal deficit, decline in the investment rate, growing social disharmony, and the revision of data.

Per capita income

Mr. Ahluwalia said the criterion to measure economic development is always per capita income. He said, “Being developed is not enough, the wealth needs to be well distributed. Along with inclusive growth, you also need the development of public goods, which has to be provided by a caring government, and not the market.”

Mr. Ahluwalia said achieving a growth rate of 8.5% consistently is not going to be an easy task for India given challenges such as changing geopolitics, rapid technological changes, and Centre-State relations. The third aspect is crucial, he said, as “70% of the quality of government is going to be determined at the State level.”

Mr. Ninan said that India’s growth rate could be analysed in comparison with the high growth rates achieved within a short duration by countries in south Asia and the medium growth rates achieved over a longer period in the West. “In the last 24 years, India’s per capita income went up less than three-fold, while China’s went up 5.3 times,” he said. 

He stressed that it is the quality of life that should be a determinant of wealth, citing healthcare, clean air, education, jobs, personal safety, and how many years it takes to buy a house as examples. In this regard, “India’s performance is fractionally better than China’s,” he said. 

Mr. Kaul said that while India was performing well in terms of financial capital, policy changes could ensure a better performance in terms of human capital. By reordering priorities, such as by spending more on district hospitals than on constructing AIIMS, and by changing policy to attract more women in the workforce, India can improve its quality of life, he said.

Dignified life

Professor Ghosh defined a wealthy nation as one which “provides everyone with basic needs and the possibility of a decent and dignified life.” This, she argued, can happen at different levels of per capita income, so per capita income may not be the best measurement of a wealthy nation.

She said that India needs a different pattern of growth altogether since it has seen reasonably high growth rates over the last 10 years without a concomitant increase in real wages. “The condition of the vast majority is not improving, that is the real failure,” she pointed out.

Prof. Ghosh also spoke about women’s unpaid work and said to applause that there is a “huge waste of economic potential since only 18% of women in India are in paid employment”.