Last month, the World Bank and IMF both put out predictions that, this year, India would overtake China in terms of GDP growth rate. This caused a flutter and was widely reported around the world. How robust is this prediction and what does it really mean?
First, this is not as monumental a milestone as some commentators made it out to be. China has had one of the most remarkable growth runs witnessed in human history, having exceeded an annual growth of 9% from 1980 to now. Four decades ago its per capita income was close to India’s, but now it is four times as large as India’s. None of all this is going to change in a hurry.
With this caveat in mind, it is a year in which India deserves to feel good. It is expected to top the World Bank’s chart of growth rates in major nations of the world. This has never happened before. Before 1990, India did occasionally grow faster than China, mainly because China’s growth gyrated wildly during the pre-Deng Xiaoping period. It was, for instance, minus 27% in 1961, when Mao Zedong’s Great Leap Forward resulted in the world’s biggest famine, and it was 17% and 19% in 1969 and 1970, respectively--a relief in the wake of the Cultural Revolution. Fluctuations of this magnitude would be intolerable to India’s polity.
Location: Sarfuddinpur, Bihar
In June this year, I was in Sarfuddinpur, a village in Muzaffarpur district in north-central Bihar. This was my tenth round of qualitative data collection in this village and I wanted to document the stories of a few Self-Help Group, or SHG, leaders; Shakuntala Devi was one of them. I first observed her presiding over an SHG meeting under the village peepal tree in July 2013. She was expertly facilitating a discussion with other SHG members around loans, but also around child health issues and the challenges faced by women in the marketplace. She disciplined free riders and rewarded contributors with a respected leader’s ease. Since then, I have seen her conduct many other meetings.
Revised excerpts from the 16th JRD Tata lecture, delivered in New Delhi, 19 August 2013.
This is a difficult time for the Indian economy. Growth has slowed, with industry shrinking over the last two successive months, wholesale price inflation has risen to 5.8%, and the rupee has been losing value sharply. There is reason to be upset about this and to demand more from policy makers. Yet, as I argue in this lecture, this is not India's biggest problem. The nation's biggest challenge at this critical juncture is a moral and an ethical one. This, for India, is a moment of moral churning. Skullduggery and corruption, cutting across party lines, have been rampant, eating into the moral fabric of the nation, leaving ordinary people befuddled and in despair. This is breeding a corrosive cynicism, leading people to believe that maybe this is the only way to be, that petty corruption and harassment is simply the new normal, whereby we should complain when we are left out of the gravy train and merrily join in if and when we get a foothold on that train. Yes, the economy has not done well over the last year or two. But once we look beyond the proximate causes we will realize that one important factor for the economy not doing well is the corrosion of values like trust and trustworthiness and their concomitant, poor governance.
In the last five years, higher food prices have provoked government interventions in agricultural markets across the globe, often in the name of protecting the poor. But do higher food prices actually hurt the rural poor?