As general elections loom, the Centre's promise of a "Viksit Bharat" (developed nation) by 2047 is gaining prominence. But what does it mean or would mean for the average Indian?

First a brief backgrounder. Its genesis can be traced to the Prime Minister's 75-week "cultural" events called "Azadi Ka Amrit Mahotsav" (India@75). It was launched on March 10, 2021 for "celebrations" of the 75 years of Independence (August 15, 2022). In his national address on August 15, 2022, the Prime Minister said this “Amrit Mahotsav of freedom” was the “start” of the “Amrit Kaal” of next 25 years (culminating on August 15, 2047). “Starting from here”, he said, “the entire journey of the next 25 years, when we celebrate the centenary of Indian independence, marks the Amrit period of creation of a new India.”

He also listed the goals: “The goal of ‘Amrit Kaal’ is to ascend to new heights of prosperity for India and the citizens of India…to create an India where the level of facilities is not dividing the village and the city…where the government does not interfere unnecessarily in the lives of citizens... where there is world’s every modern infrastructure…building an AatmaNirbhar Bharat…we have to move…further. 100% villages should have roads, 100% households should have a bank account, 100% beneficiaries should have Ayushman Bharat card, 100% eligible persons should have gas connection under Ujjwala scheme and 100% beneficiaries should have Aawas…”

There were more details but the intent and the essence are very clear: In short, “Amrit Kaal” culminates in “Viksit Bharat@2047” and the promise is to make India a “developed nation” by 2047.

Thereafter, Finance Minister Nirmala Sitharaman stepped in. In the 2022 budget speech she said her budget’s purpose was “to lay the foundation and give a blueprint to steer the economy over the Amrit Kaal of the next 25 years” (ending with 2047), quoted the Prime Minister and said the goals were “to ascend to new heights of prosperity for India and the citizens of India” with a focus on “macro-economic” growth, and “all-inclusive welfare”. She declared her 2023 budget as “the first Budget in Amrit Kaal” and her 2024 (interim) further said: “Our vision for ‘Viksit Bharat’ is that of “Prosperous Bharat in harmony with nature, with modern infrastructure, and providing opportunities for all citizens and all regions to reach their potential”.” These budgets had specific allocations to realise the goals too.

The question that strikes now is: What about all those goals and budget allocations already declared in the past two-and-half years?

Decoding ‘Viksit Bharat’ plan for 2047

On February 9, 2024, Bibek Debroy, chairman of the Economic Advisory Council to the Prime Minister (EAC-PM), had pinned down the “Viksit Bharat” concept in an article, “How will we know that Bharat is Viksit?”

He concluding paragraph says it all: “Thus, here are the options to pin down India in 2047. (1) HDI more than 0.8. (2) A movement to the high-income category in constant US dollars. (3) A movement to the high-income category in current (2047) US dollars. We usually intend (2) or (3) and understandably. (3) is easier than (2) to reach.”

Notice, Debroy rules out the goal of human development (HDI). What does he mean by raising India to “high-income” category?

Using the World Bank’s classification of countries, the goal would be to transcend India from its lower-middle income category (“$1,086 and $4,255”) to high-income one (“more than $13,205”). His numbers match the World Bank’s 2023 per capita GNI levels (at current US dollar) for different income-group countries. The World Bank’s per capita GNI is different from its current USD or PPP methods. It is also different from per capita GDP – India’s per capita GDP for FY24 is estimated at Rs 2,10,679 while per capita GNI is lower at Rs 2,07,587 (AE2, current prices).

Since the NITI Aayog’s paper on “Viksit Bharat” is not available (submitted to the Centre on February 20, 2024 but not made public) the starting point has to be Debroy’s. He is not just an economist, his unique position as head of the EAC-PM gives him rare insights.

Side effects of unifocal push for GDP growth

Debroy’s “we usually intend” sentence makes three big points about the vision/goals of “Viksit Bharat”. It

·    rules out improvement in human capital (HDI).

·    omits income inequality.

·    exclusively focuses on GDP growth (per capita GNI, whether at current USD or 2047 USD).

No surprises in any of it.

The Centre’s economic policies of the past 10 years are exactly the same – GDP growth alone is sufficient to turn India into economic superpower. The latest example of this is the Finance Ministry report “Re-examining narratives: A collection of essays”, released in December 2023.

In that report, Chief Economic Advisor (CEA) V Anantha Nageswaran argued: “…in contrast to the advanced economies…the Indian experience has been that of convergence between growth and inequality rather than of conflict. Thus, for a developing country such as India…the focus needs to continue to be on growing the size of the economic pie rapidly, at least for the foreseeable future.” He also re-emphasised prioritising growth over redistribution of income.

His arguments can’t be dismissed merely as contrasting reading of the contemporary global and Indian realities, though they seem so (more of it later). Here are three instances to give a better perspective.

One, when 190-odd countries adopted the UN’s SDG goals in 2015, two significant changes were made to the earlier MGD goals it replaced: (i) added the goal of “reduced inequalities” (mainly of income but also of opportunities and others) because it was realized that inequality of all kinds “deprives people of opportunity and subjects many to conditions of extreme poverty” and (ii) separated the goal of reducing poverty into two new goals, “no poverty” and “zero hunger” because despite high “growth” during the 15 years of running the MGD poverty and hunger were not eliminated to the extent it was expected.

Two, a year earlier in 2014, Thomas Piketty changed the global economic discourse forever with his magnum opus “Capital in the Twenty-First Century”. It told the world about post-1980 “resurgence of inequality” in “developed countries” because of the neoliberal (free-market) economic and political push. This was a reversal of “reduction of inequality “between 1910 and 1950”. Nobel laureates Stiglitz and Krugman have, before and after Piketty’s 2014 book, said the same – arguing that neoliberalism is not economics or supported by evidence but a “political” doctrine/construct and has failed to deliver (eliminate poverty, hunger and inequality).

Piketty (with Lucas Chancel) also said the same reversal happened in India for the same reason at the same time – a sharp rise in inequality after the market-reforms of mid-1980s and liberalisation of 1991 which happened to produce historic high GDP growth but led to income/wealth concentrating at the top 1% and 10%, not the middle 40% and bottom 50%.

The pandemic exacerbated poverty, hunger and income inequality.

Three, in December 2023, Raghuram Rajan patiently explained how India’s GDP would become four times bigger by 2047 (at 6% growth) – hence, per capita GDP (or GNI) will also rise four times – and yet, India would still remain a lower middle-income category with below China’s current per capita income (GDP or GNI) and by which time its demographic dividend/advantage would have disappeared.

Nageswaran can’t be unaware of any of the above. But he is in sync with the Centre’s neoliberalism push which began in 1980s and 1990s – and intensified in recent years. Hence, all the focus is solely on GDP growth – as the panacea for all that ails India.

Human capital development remains neglected despite India’s extremely poor record. The UNDP’s HDI report of 2022-24 lists India at 134th among 193 countries, with its HDI score of 0.644 (“medium human development country”) – below China (75), Sri Lanka (78), Bangladesh (129) and Bhutan (125). More worryingly, India’s HDI score fall from 0.645 in 2018, after having consistent risen from 0.434 in 1990. The fall is partly because of both pre-pandemic shocks of demonetisation and GST and the pandemic shock. This report also says, “after 20 years of steady progress, inequality between countries at the upper and lower ends of the HDI has reversed course, ticking up each year since 2020”. Besides, India continues to be home to maximum poor, hungry and illiterate in the world (both before and after the pandemic).

The World Bank and Ashoka Mody have attributed the miraculous rise of China to its relatively higher HDI before it opened its economy in 1980s, prioritised HDI growth after 1980s and continues to do so now in 2024 (allocating more on education, social security and employment, health and sanitation than defence. India did the reverse in its 2024 budget (defence outstripping the others).

Coupled with this, privatisation of health and education denies access to quality services to the masses. Jobs are rapidly shifting to low-productive, low-paying agriculture and self-employment as high-productive, high-income jobs disappear.

“New welfarism” and “guarantees” like “free” ration to 67% Indians for next five years and cash to farmers (PM-Kisan) and women (Ujjwala) are good to avert poverty and hunger but are no replacement for quality education, health and jobs (income) and can’t raise average Indian to those of development countries.

Sure, without addressing human capital development and income inequality, the GDP will keep growing rapidly – as it does now. But all round development will still remain a goal.

Follow us on Facebook, X, YouTube, Instagram and WhatsApp to never miss an update from Fortune India. To buy a copy, visit Amazon.