Mohan Guruswamy | Aug. 15 thoughts: We've done better than most; let's not be too pessimistic

How did we do so far?

Come August 15, we will have the usual litany of lies about India’s seven wasted decades. Were they?

The Indian economy is now the fifth largest in the world measured by nominal GDP and the third largest by purchasing power parity (PPP). Its GDP in 1950 was $30.6 billion. In 2017, India’s GDP was $2.54 trillion or $9.69 trillion (PPP). Its industrial sector accounts for 29.02 per cent of its Gross Domestic Product and India is now rightly classified as a newly industrialised country.

When India gained Independence back in August 1947 its population numbered about 340 million. The literacy level then was 12 per cent, or about 41 million people. In 2017, India’s population scaled 1.34 billion and the literacy level reached 74 per cent, or about one billion people. That is a huge shift in numbers, and a hugely impressive achievement. Never before in history have so many people moved from one to the other bracket. True, our numbers are staggering, and therefore only one other country can provide a benchmark.

In 1949, China’s population was 540 million and its literacy level was estimated at 20 per cent, or 104 million. In 2017, China also has a population of about 1.34 billion and a literacy level of 85 per cent, or 1.14 billion. Both India and China have lifted almost a billion people each from ignorance of the word to some modest knowledge. China employed a highly mobilised system of government with no restraints on coercion to achieve this, while India did it under a system of completely voluntary compliance. That is to my mind the biggest achievement of our seventy-four years of Independence

At the time of Independence India accounted for only three per cent of the world’s GDP, or about Rs 2.7 lakh crores. In 2017, India accounts for 8.5 per cent of world GDP (source IMF), or about Rs 135 lakh crores. India’s GDP this year is significantly bigger than that of its erstwhile colonial master, who mulcted the world’s biggest economy in 1700 to beggar status in 1947. More than that, India now adds 17 per cent to world GDP growth, giving it a considerable economic heft. What is more important is that internal resources drive a good part of this growth. The savings rate has risen from eight per cent of GDP to 31 per cent now and continues to be on an upward trend despite the recent setbacks.

India produced about 50 million tons of foodgrains in 1947, while it produces five times that much now. Clearly, these are big achievements and only the churlish will not give credit where it is due. More important, famine has been abolished from India. In the last great famine that India experienced in 1943, two million people had died in Bengal. By contrast, in the 1965 famine of Bihar there were no starvation deaths. India has not experienced a famine of that magnitude again.

Where credit is due, much blame is also due. At the time of Independence, the incidence of poverty in India was about 80 per cent, or about 250 million. When poverty numbers began to be counted seriously in 1956, Prof. B.S. Minhas of the Planning Commission estimated that 65 per cent, or 215 million Indians, were poor (Rs 220 per year). In 2017, the number of people below that same poverty line — of 2,200 calories a day — is about 269 million, though the incidence has fallen to about 21.92 per cent of the population.

In 1947, agriculture accounted for 54 per cent of India’s GDP. In 2017, it is at about 13 per cent. But at the time of Independence 60 per cent of India depended on agriculture for a living. In 2017, it was about 52 per cent, or 650 million people, as opposed to about 200 million in 1950. Therein lies the real tale of India’s colossal failure to make its tryst with destiny. It still has too many people living off the land. Land is finite, but the population is not. By 2050 India will have a population over about 1.7 billion, and a good portion of that population will have to be gainfully employed outside of agriculture and the rural sector. If India were to be horizontally sliced by income, it can be said to be three overlaid nations. The one below is akin to sub-Sahelian Africa, the one in the middle to the Southeast Asian neighbourhood barring Singapore, and the top layer enjoying the lifestyle and living standards of a middling European nation.

How did we do in these seven decades of Independence? Look all around us. Clearly, we have done better than most. If you factor the human cost in China, we probably did better than all. In 1947 India chose to be a full democracy and a nation of equals. It ordained itself to have a government by popular choice with an attendant political economy and all the implied pitfalls. Our founding fathers decided that in such a diverse country all aspirations needed to be heard and reconciled. Our giant neighbour to the north chose a system where choices were limited to a few.

About this choice, Robert Frost said it best: “Two roads diverged in a wood and I — I took the one less travelled by, and that has made all the difference.” Of course, we could have done better. But what is better than being a united and optimistic nation?