Development in India

The Human Development Index (HDI) is a statistic composite index of life expectancy,
education, and per capita income indicators, which are used to rank countries into four tiers of
human development. Accordingly, a country will rank higher in HDI when the lifespan or the
standard of living is higher, education level is higher and the gross national income GNI (PPP)
per capita is higher.

India has come a long way since its independence in 1947. There is no denying that India has
experienced an increase in per capita income as well as reductions in poverty and infant
mortality rate since. Nevertheless, in comparison to countries like those of China and South
Korea who gained independence around the same time, India’s performance remains way below
its potential. This is primarily because, post independence the government invested in a strategy
that focused on rapid industrialization by implementing centrally prepared five-year plans that
involved raising a massive amount of resources and investing them in the creation of large
industrial state owned enterprises instead of on agriculture, which was the livelihood of nearly
three-fourths the mass. The leaders believed agriculture to be characteristic of a backward
economy. A strategy centred on agriculture would have looked something like this: investments
in agriculture take the form of irrigation projects, education of farmers in scientific methods of
farming, construction of rural roads and storage facilities, and agricultural research and
development. Once the agricultural sector was relatively healthy and the poverty of its
participants somewhat reduced, rising incomes could have been used to finance industrial
development. Another alternative could have been to rely on private enterprise for industrial
development while the government focused its resources on investments in infrastructure, public
health, and education—sectors that are not served well by the private sector.

However, standing in the 21st century, year 2021, while the world is fighting a pandemic along
with a horrifying drop in economy, the situation looks grimmer than imaginable in India. Nearly
4 lakh cases are being recorded daily while people struggle to gather vaccinations, oxygen,
injections, hospital beds and medication for the lethal virus. It perhaps now would make more
sense for the central government to invest money in constructing burning ghats rather than
hospitals and other medical facilities. The Australian very correctly points out the grave situation
as it says, “Hubris... nationalist politics... slow vaccine roll-out, an ill-equipped health system...
and promotion of the economy over containment”- and that is precisely what happened.

India’s floundering situation has made it to the headlines of other internationally acclaimed
newspapers:

The Times, London, carried an article with the headline “Modi flounders in India’s gigantic
second wave,” and blasted the government for “the air of complacency and denial that have
dogged his government’s response to the crisis.”
The Guardian said “The system has collapsed: India’s descent into Covid hell”. The newspaper
added: “Many falsely believed that the country had defeated Covid. Now, hospitals are running
out of oxygen and bodies are stacking up in morgues.”

Moreover, the employment rates took a massive hit with the lockdown on the onset of the
pandemic when people lost jobs left and right. Their livelihoods were reduced to almost a zero.
A majority still remains in darkness after a year and why is that? What has the government done
to safeguard the lives of these masses? With no money to spare, the economy dipped even lower
and development in India took a step back.

Amidst the crisis, the Assembly Elections were conducted with the Government and the Election
Commission doing nothing for preventing large crowds from gathering and part taking in rallies.
The rise in cases can be blamed on factors like allowing thousands to attend poll rallies,
permitting the mega Kumbh, ignoring experts' advice on more infectious strains, and a critical
shortage of medical oxygen and vaccines. Where is the visionary one looks for in an
administrator? Why was our beloved PM making tours from Delhi to Bengal, while Maharashtra
was asphyxiating? India had more than a year to combat the virus and protect itself from the
inevitable second wave.

Towards the end of the previous year, just as the unorganized sector, especially the agricultural
sector was reviving from the harsh conditions of the pandemic; all hell broke loose when the
government announced the new Farm Bill. The farmers’ days of endless protests are still on
today to no luck. Talk about a democracy where the people’s voices go unheard!

Several significant economic challenges remain for India. The economy has polarized into a
highly productive, modern, and globally integrated formal sector, employing about 10 percent of
the labor force, and a low-productivity sector consisting of agriculture and urban informal
activities, engaging 90 percent of the labor force. The sectors that have experienced the most
growth are services and capital-intensive manufacturing. It is illustrative that IT and
pharmaceuticals are the two sectors of the economy with international renown. Such industries
tend to be urban and employ mainly skilled workers. Yet to come India’s way is millions of low
skill manufacturing jobs that have allowed the poor in East Asian countries to climb into the
middle class. Companies are loath to set up labor-intensive manufacturing because Indian labor
laws are some of the most restrictive in the world. The second reason for the dearth of
manufacturing jobs is that the country’s infrastructure is relatively deficient, and so companies
increasingly practicing just-in-time inventory management do not find it cost-effective to include
India in their global supply chains.

Given the current policies and state of governance in India, it is hard to see an obvious path into
the middle class for the multitudes still remaining in poverty. Global demand for low-wage, low-
skill labor to sew T-shirts or assemble TVs is not what it used to be, because production is now
becoming increasingly mechanized and some of it is being “reshored” back to the rich countries.
For several hundred million poor people in delicate health and with little education, the country
will have to find a way to overcome the technical, institutional, and economic barriers to
developing the capabilities necessary for functioning in a twenty-first-century economy. It is not
a task for the faint-hearted.