India: Growth Sans Development

Abstract

The pursuit of economic growth has been the single most important policy goal across the world for the last five decades. The default assumption is that – financial crisis aside – growth will continue indefinitely. Not just for the poorest countries, where a better quality of life is undeniably needed between for the richest nations where the excess of material wealth adds little to happiness and is beginning to threaten the foundations of our well being. The myth of growth has failed us. It has failed the two billion people who still live on less than $2 a day. It has failed, spectacularly, in its own terms to provide economic stability and secure people’s livelihoods. India has come a long way in terms of economic growth. Softer indicators – aspirations, health and literacy – are all registering distinct improvements. Spending power opportunities and splurging propensity have been shooting up. Poverty ratios have gone down, the per capita income is growing, the economy is expanding at a fast pace. Poverty ratios have gone down not the number of poor. Poor still remain vulnerable largely unprotected – socially, economically or legally. The shift to inclusive growth as a policy discourse is of recent vintage. This shift marks a broadening of concerns about inequality. The focus has been on how the excluded group can participate in aggregate growth. This takes policy discussions to the domains of education, health, basic infrastructure, agricultural productivity basic urban services and so on. Without addressing those issues India’s longer term development prospects would be in threat. Structural inequalities in India are not only deep and persistent, they are also intimately linked with institutional structures in the political, social and economic domains – and they are likely to impede the transformations necessary for long term growth.