Happy New Decade! Ten years is a long time in an individual’s life, less so for a country the size of India. Incidentally, the current year 2020 is where a lot of people felt India will become a superpower (remember all those Vision 2020 and Superpower by 2020 presentations)? While that has not happened, there has been significant change.
Per capita GDP, one of the most important indicators of standard of living, doubled from around $1,000 to $2,000 per person, an average growth rate of around 7.2% per annum. This is real wealth in the hands of Indians, and we are all consuming more than we did a decade ago. There is no political suggestion in these achievements. In the last decade we had Congress as well as BJP governments, so whatever has happened is a combined contribution of the two. We could have grown faster. There is still a long way to go to before we reach developed country levels like that of the USA ($60,000 per person) or even China ($10,000 per person). But we can now at least aspire to $5,000 per person by 2030, a respectable level, which will mean we are no longer a poor country. Take it to a $12,000 per person number by 2040, and we will become a semi-developed country, something many of us might be lucky to see in our lifetime. Rather than ‘superpower’ hyperbole, this can be our aspiration for India for the next two decades: $5,000 per capita GDP by 2030, $12,000 per capita GDP by 2040.
This doesn’t sound sexy as ‘next superpower’ does, but if achieved, this will dramatically change the life of Indians. Per capita GDP apart, compared to 2010, we have better roads, better airports and almost everyone has a mobile phone. Most people have internet connectivity. Abject poverty is down, education and health indicators are higher.
While the overall picture of the last decade was decent, as we enter 2020, we face a bleak economy. The average growth rate in the past decade was 7.2%, but the latest quarterly data shows the number at 4.5%. The $5,000 per person by 2030 aspiration requires an annual GDP growth of 9.6%. This is achievable if we focus and make it the number one priority for the nation. A collective goal for the next 10 years is to make the average Indian earn 2.5x more than s/he does now (or from $2000 to $5000).
This goal requires a combination of things to be in place. Investor confidence; simple, business-friendly policies; end of bullying by regulators/bureaucrats/taxmen/politicians who love to assert (or abuse) their power; feeling of harmony and safety in the country; stable rates/ levies/ taxes that do not change say every time the GST council meets in Goa (plays havoc with spreadsheet projections of investors).
Infrastructure is a given requirement too. Airports that don’t need runway repairs every three months, internet connections that are stable and are not shut down on a regular basis, electricity and water are absolute basics for any business-friendly environment in the country.
These factors have been mentioned and analysed before. The solutions exist. The experts are there. What has been lacking is focus and priority. Somewhere, we as Indians and almost any government in the Centre is never convinced that growing Indian incomes is a worthwhile, top-priority goal.
Religion gets us going, caste gets us going, personality cults of leaders get us going. But a burning desire to make every Indian affluent is not something that gets us passionate. Maybe the government feels the people don’t care for it, so why bother? If slapping Pakistan or asserting Hindu supremacy makes us happier than making giving every Indian a decent house, education and healthcare, then don’t we deserve to stay poor?
Freeing the economy requires the government and its babus to let go of their power to a certain extent. They don’t want to and won’t unless we people push them towards it. If we as citizens demand economic growth as top priority, any government will have no choice but to focus on the economy as well.
Let us welcome the next decade with one firm resolve: $5,000 per capita by 2030. A goal like this is better to communicate to Indians, as it sounds more personal than a macro $5 trillion economy. In today’s money, that is around Rs 30,000/month per person or around a lakh per family. This is an amount that can get you a good, dignified and civilised life in India. This is an amount that is achievable.
Let us resolve that in the next decade, we will keep reminding ourselves and the government, to make the economy a top priority. Let’s be humble and shun superpower rhetoric. Let’s have a better, achievable and worthwhile goal. To give the average Indian a dignified life, or a per capita income of $5,000 by 2030.