The Prime Minister has set the goal of India becoming a developed country by 2047. On the way, India’s Gross Domestic Product (GDP) is soon going to surpass that of Germany and Japan, if the current official rates of growth are maintained. In today’s world, projecting five years or 24 years ahead is fraught with challenges. Who could have foreseen the COVID pandemic in 2020 and the war in Ukraine in 2022? Successful landing of Chandrayaan 3 near the South Pole of the Moon is undoubtedly a great achievement for the nation. But that does not make India a developed nation. Major challenges confront the nation, such as providing good education and healthcare. This can only be achieved if the number of schools and health facilities in rural and semi-rural areas is increased substantially. The Indian Space Research Organisation (ISRO)’s success shows that India can achieve much more if it sets its mind to it. ISRO’s success also implies that even though we focus on going to the Moon, we neglect day-to-day things that are necessary to become a developed nation— like providing clean drinking water and sanitation to all. Suppose nothing untoward happens on the road to 2047, our official GDP will keep rising. Before the pandemic, the official growth rate had dropped sharply from 8 per cent to 3.9 per cent, for an average of 6 per cent. If the growth rate continues to hover around the 6 per cent mark till 2047, India’s GDP will become 4.05 times the current official GDP of US $3.7 trillion, that is, US $15 trillion. Still much behind US and China’s current GDP. In the meantime, the world’s two largest economies would have continued to grow. India’s population is expected to reach 1.65 billion by 2047 so the per capita income will become US $9,000 by that year. The current World Bank benchmark for a high-income country is a per capita income of US $14,000. So, India will only transit from a lower-middle to an upper-middle income category country.

 

Only if the average rate of growth becomes 8 per cent now will the per capita income reach US $14,000 by 2047. Growing at 6 per cent over 24 years will be a challenge— 8 per cent appears like a far-fetched dream. The current high levels of inflation, slow growth of major world economies and supply bottlenecks will be the major impediments in achieving a 6 per cent growth rate. Even if India’s per capita income reaches US $14,000 by 2047, would that make India a developed nation? Oil producing nations such as Kuwait and Brunei have for long enjoyed high per capita incomes. They are characterised as rich but not developed nations. A developed nation is one that is technologically advanced and is able to move along the technology frontier to stay competitive. It has to be dynamic to take care of its problems and has to be able to compete on equal terms at the global stage. India does not fit that bill, as it is heavily dependent on import of high technology products. Granted it has done better than most developing world nations but it mostly functions with intermediate and low technologies. Consequently, India mostly exports low value-added items while importing higher value-added items. The result is a large trade deficit. Countries that possess high technology do not share it. So India has to develop it on its own. Multiple factors underlie technological dynamism. First, as data from the Annual Status of Education Report (ASER) shows, the quality of school education is not very good. On the other hand, only a few institutions of higher learning are involved in advanced research. Poor school education results in a weak base which makes students less capable of undertaking advanced research. Sub-standard advanced research means both educators and the knowledge base for school education continue to be of a deficient quality. Second, given India’s poverty (India is the poorest G20 nation), adequate expenditure on public education is a crucial factor in nurturing talent and for employing talented researchers and teachers. Third, commitment is crucial for good teaching and research and that to a large extent depends on society’s commitment to promoting knowledge generation.

 

Fourth, technology itself creates multiple possibilities at the technical and social levels, which makes it impossible to plan the future precisely. Before 2000, people wrote letters and sent telegrams but that is largely history now. One visited a bank branch for transactions but now they are carried out via the Internet and machines, such as ATMs. E-commerce has spread to the detriment of the neighbourhood stores. Even those who are at the frontiers of AI are asking for a moratorium on further research because it poses an existential challenge to human kind. AI, automation and mechanisation are not only posing challenges to semi-skilled jobs such as those of vehicle drivers and workers in business process outsourcing (BPOs) but also to skilled jobs of technicians and army men. It is said that in five years even many skilled jobs such as those of teachers may be impacted by AI. Technology development requires investment in research and development (R&D). But it is risky because there is no guarantee of success and there is a chance of obsolescence due to the acceleration of technical change. So, investors may not be able to recoup the investment made. Various committees that have proposed reforms in higher education have treated autonomy as a slogan to be bandied while actually their proposals would result in greater bureaucratisation of the institutions which would undermine autonomy. So, India may do well in select areas, like space exploration, but not in general, and that makes the task of becoming a developed country difficult even with a higher per capita income. (IPA) Courtesy: The Leaflet