Aside from the recent run on the rupee, the recent release of a number of reports and books on the Indian economy suggest economically, socially and environmentally things are not what they should be in India. As one of the big emerging economies within the fraternity of the BRICs this criticism is clearly not welcomed by Indian officials. But, it is the necessary reality check that India needs for it to progress on behalf of all of its citizens and not just its elites.
The debate on the state of the Indian economy was first and foremost instigated by Prof Amartya Sen in his latest book on India’s social failures and how to fix them. Clearly he wants the Indian state to do more to tackle poverty in the country, highlighting that as an indicator over half of Indians still do not have access to a toilet despite the country’s extraordinary growth levels in recent years.
That’s more than 600 million people who have to defecate in the open. This is not surprising given the pitiful investment in health and education services. Indeed some of the poorest Indian states like Bihar and Orissa account for the biggest concentration of deprivation in the world.
Of course, states like Kerala and Tamil Nadu are good examples of how social investment during the 1960s and 80’s have reaped dividends in economic growth. But, at the federal level, India still lacks long-term policies and the political will to implement them.
Since the book launch the World Bank has reported that environmental damage costs India Rs3.75tn annually, or 5.7% of India’s GDP. The study has taken into account environmental damage in India from urban air pollution; inadequate water supply; poor sanitation and hygiene; and indoor air pollution.
Such an impact imposes costs to society in the form of ill health, lost income, and increased poverty and vulnerability. The report suggests that growing economically now and cleaning up the damage later will not be environmentally sustainable for the country in the long run and that it would be much better and cost-effective to have a low-emission, resource efficient greening of the economy from the outset.
And finally we must return to the status of women in India. Gender based equality plays a major role in a country’s overall development and according to Prof Amartya Sen India lags behind in the Human Development Index (HDI). The Delhi gang rape at the beginning of the year certainly brought this to the attention of the world but let us not forget that this is not just a city problem but also in the villages, as one will find out if you talk to Dalit women. He usefully states that neighbouring countries, like Bangladesh, have left India behind on all social indicators predominately because of its large number of women health workers and school teachers helping to overtake India in every aspect of HDI which interestingly has been largely undertaken by its NGO sector.
So despite considerable economic growth and an increasing sense of self-confidence on the global stage, where now for India? Well it can certainly start by valuing its women a lot more then present. It could also ensure the middle classes pay their fair share for example, a tax on middle class luxuries such as gold and diamond imports could easily bring US$10 billion for such critical investment in health and education that the country desperately needs and the malaise in public services can be helped by keeping the allocation of contracts and jobs firmly away from politicians.
As for the Professor it sounds to be his last crusade and one he has returned to on many occasions, as he responds to his critics by saying that economic growth is very important as a means of bettering people’s lives, but “to go much further, faster” it has to be combined with devoting resources to remove illiteracy, ill health, malnutrition and other deprivations.
Clearly economic growth is greatly helped by early public support for education and health services, a fact highlighted by the experiences of East Asia and many other countries.