GDP Hits Historic Mark, Quietly

There was a quiet milestone that India reached a couple of months’ ago when the country’s GDP crossed the one trillion dollar mark for the first time in all history. It was more a financial juggle that got us to the number - with rupee depreciating to the 41–level against the US dollar.
This puts us in the company of eleven other countries in the world. Is this a ‘dirty dozen’?

To give you an idea of what as size this means: with 300 million, the US GDP is about 13 times India’s. That's just 25% of India’s population. Japan’s GDP is at 4 trillion. At 127 million people, they are just a tenth of India's people. China, with about the same population as India, is surged to USD 10 trillion.

Among the other countries which are in the Trillion Dollar League, Germany is at 2.5 times India’s GDP, but with a population that is just 80 million, or 7% of India’s people.

What does this all tell us? While the numbers are benumbing, the important thing to realize is that the Indian economy’s growth is driven by a population that is 93% illiterate. Never mind the official hand-out on adult literacy rate that shows a smug 61% literacy in India. The official sleight-of-hand is that even the ability to simply put down a signature is considered literacy by our statisticians. The figures are more dismal, if you need conciliation, in countries like Pakistan or Bangladesh where the literacy rate, officially, hovers around 40%.

Well, is there an argument to suggest that greater literacy can spell greater growth? It is the same 'illiterate' people of India or South Asia who built some of the most exquisite structures in the world in the distant past. It is these same people who, up until 1700, offered systems of governance and administration that was emulated by many other regions in the neighbourhood of South-East Asia. The influence of Indian Architecture or of its ancient administrative system is currency to this date in countries like Thailand and Vietnam, or Cambodia and Indonesia.
There is the other question that foxes all: does growth in GDP mean greater welfare? Many years ago, in the early 80’s, Robert McNamera, who was then the World Bank President, offered a memorable address: “The world has been armed with a faith which has suggested that you can sacrifice everything before this idol of growth, and prosperity will be your reward for it. Never has growth been accompanied by any reduction in poverty. The lot of the lowest 40% has only worsened."

This is not a column that can offer solutions. At the most it can ask some questions. This milestone on GDP has taken India 61 years to achieve. The bad news is yet to come: the second trillion dollar will now be reached in a far shorter time span of about a decade-plus, even if there is a faltering of the CAGR from its current gallop at 8 pc and over.

While an aspirational India strives to get to that second milestone in the decade or so ahead of us, we need to see how to enroll the rest of the Indian people on how more cars and more homes are not going to bring health and happiness and a quality of life that one desires. While it must be said, of course, that it is not a question solvable through armchair speculation; it has to be only through a more defined struggle with greater advocacy and less inequality.

- Chandrashekar Hariharan
The writer is head of BCIL, a pioneer of green homes in India.