India’s Economic Development: Striving for a Balanced Approach
India’s remarkable 75-year journey towards economic development has been both impressive and disappointing. While politicians have often claimed credit for the nation’s growth and progress, they are equally responsible for the gaps and deficits that persist. In this article, we will explore some of the major shortcomings in India’s economic development and the need for a more inclusive and sustainable approach.
One of the crucial gaps in India’s economic development is the lack of adequate employment opportunities. Many individuals, especially the youth, are being encouraged to become entrepreneurs and achieve quick success. However, this approach overlooks the reality that not everyone has the desire or capability to be an entrepreneur. The job market is shrinking, and the rapid advancement of Artificial Intelligence threatens to further reduce employment prospects. The informalization of the labor force, the growth of contractual labor, and declining real wages have also contributed to growing insecurity and uncertainty regarding livelihoods and incomes.
These shifts in the labor market have significant implications for poverty and economic vulnerability. Although extreme poverty has decreased over the past decades, mid-level poverty remains stubbornly persistent. According to the World Bank, 40% of the population still earns below the poverty line. Furthermore, India’s ranking on the Global Hunger Index has been consistently low, indicating ongoing challenges in ensuring food security for all. The COVID-19 pandemic has exacerbated poverty levels, pushing many more individuals into extreme poverty.
While India’s macroeconomic growth has lifted average incomes and reduced absolute poverty, it has also widened the gap between the rich and the poor. The top 10% of Indians earn a disproportionate 57% of the total income and own 77.4% of the country’s wealth. On the other hand, the bottom 50% of the population struggles, owning only 3% of the wealth and earning a mere 13% of the income. Such extreme economic inequality is ethically unacceptable and has far-reaching consequences, including restricted social mobility and potential social conflicts.
India’s performance in terms of comprehensive development, as measured by the United Nations Development Programme’s Human Development Index, has been consistently low. While per capita incomes have risen, access to education and healthcare remains a challenge for the majority of the population. Additionally, India’s rankings in measures of political and civil liberties, economic freedom, press freedom, and overall democracy are far from satisfactory. These factors impact the freedom and agency individuals have in shaping their own lives and contribute to the overall development of the nation.
In today’s world, sustainable development and environmental preservation are critical components of economic progress. Unfortunately, India’s environmental performance leaves much to be desired. The nation ranks poorly in terms of urban pollution, ecosystem degradation, and climate risk vulnerability. Neglecting the environment not only harms the planet but also undermines efforts towards long-term development, especially for a nation as populous and climate-vulnerable as India.
Measuring economic development solely based on national income or gross domestic product fails to capture the full picture. A more comprehensive approach is necessary, considering indicators such as poverty, unemployment, inequality, freedom, and environmental sustainability. By addressing these issues, a nation can enhance its soft power and ensure a more balanced and equitable development path.
It is crucial for India to acknowledge these inconvenient truths and adopt a more holistic approach to economic development. This can only be achieved through collective efforts and comprehensive policy interventions that prioritize inclusive growth, job creation, poverty alleviation, social mobility, environmental sustainability, and safeguarding human rights and freedoms. By striving for a balanced approach, India can unlock its true potential and achieve sustainable and inclusive development for all its citizens.
