India @ 75: Temper celebrations for now

India’s people have much to take pride in as their nation heads toward a century of existence in its modern form. But on every front, the numbers alone tell a tale of unrealised potential.

India, Independence day
A simple way of taking stock of India's situation at 75 is to examine different measures of its relative global standing. (PTI)

As India marks its 75th anniversary as an independent nation in the post-colonial era, there is much to celebrate. India has made considerable material progress, retained democratic governance structures, preserved some degree of individual freedoms and human rights, and maintained its territorial unity and sovereignty. In several of these dimensions, there are also serious concerns about the future, but a proper discussion of these concerns is beyond the scope of a brief newspaper column, so one can merely note that celebratory exuberance ought to be tempered.

A simple way of taking stock of India’s situation at 75 is to examine different measures of its relative global standing. Many of these measures are of recent origin, so comparing trajectories over the decades is difficult, but a suitable choice of other countries with similar starting points helps in this respect. Therefore, consider Pakistan, Bangladesh, and Sri Lanka among India’s south Asian neighbors, and China and South Korea as east Asian nations that were in similarly disadvantaged positions seven-plus decades ago.

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The simplest measure is, of course, Gross Domestic Product (GDP) per capita, adjusted for differences in purchasing power. According to the International Monetary Fund, India’s figure for 2022 was $8,358. South Korea led our group of comparators, at 53,501 (comfortably achieving high-income status), with China at 21,364, Sri Lanka 15,387, Bangladesh 6,633 and Pakistan 6,470. So, India has considerable scope for improvement in the average material well-being of its citizens.

GDP and similar measures have been criticised for being too narrow in scope, and for neglecting the distribution of material resources by using averages. The second of these criticisms can be addressed by looking at poverty rates and inequality measures. Using the World Bank’s international poverty standard of $3.30 a day (this ignores relative poverty and country-specific measures) for the most recent years available, South Korea rate was 0.23%, China’s was 2%, and Sri Lanka’s 12.2%. Pakistan’s rate was 37.2% in 2018, Bangladesh’s was 54.6% in 2016, while it was 63.8% for India, but as long ago as 2011. These are not national poverty lines, and poverty measurement and data are fraught with contention. For India, an unofficial academic estimate for 2018 provides a rate of 47.3% for 2018. Again, there is much room for improvement.

Inequality measures are also difficult to construct reliably. The common Gini index ranges between 0 and 1, from perfect equality to maximum inequality. India’s wealth Gini is quite high, at 0.83, compared to China and Sri Lanka (0.7 each), Bangladesh (0.68), Pakistan (0.67), and South Korea (0.61).

The narrowness of GDP as a measure of well-being was addressed by the creation of a Human Development Index (HDI), which combines GDP with measures of health and education status. The HDI is scaled to lie between 0 and 1, and South Korea measured 0.916 in 2019 followed by Sri Lanka (0.782), China (0.761), India (0.645), Bangladesh (0.632), and Pakistan (0.557). The basic HDI has also been modified to take account of income inequality and gender inequality, but the rankings are not that different, though Bangladesh and Sri Lanka do relatively better than India and Pakistan in these dimensions. These measures all come from the United Nations, but a completely different kind of measure, from a completely different source, the so-called Freedom Index (with personal and economic freedom as components) tends to correlated fairly well with the HDI approach. The reasons for this are likely complicated and non-obvious, once one puts ideology aside.

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A final measure of India’s situation is the World Happiness Index (WHI). This is constructed completely differently than all the other measures. It is based on directly asking people about their life satisfaction, on a scale of 0 to 10. The WHI turns out to be correlated with GDP per capita and measures of societal closeness, but those are not used in its construction. The global range of scores in the last report was from 2.40 to 7.82. India measured only 3.78, lower than Sri Lanka (4.36), Pakistan (4.52), Bangladesh (5.16), China (5.59), and South Korea (5.94). Furthermore, India’s score has been falling for several years, with a slight upward blip in 2021.

The independent economic and social measures that have explanatory power for the WHI would predict a value for India that is higher than what is measured from asking people directly. Why this is so is a mystery. In any such analysis, there will be countries above and below the values predicted by a line of best fit, and there is so much global heterogeneity that each country’s residual may have its own specific explanation. Numbers can only tell us so much.

India’s people have much to take pride in as their nation heads toward a century of existence in its modern form. But on every front, the numbers alone tell a tale of unrealised potential—in average material well-being, equality, development of individual capabilities, and overall life satisfaction (“happiness”). Digging deeper into the nature of the societal and governmental institutions that keep India’s potential from being realised will require deep engagement and inclusive debate among citizens and their democratic representatives, not triumphalism or blame-shifting.

The writer is professor of economics, University of California, Santa Cruz

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