How we are still a developing country ??

We normally hear questions like "Why we are still a developing country?" but turning the way we ask questions can change our outlook. "How" directly questions the "Action", while "Why" questions the "Idea\Thought" behind action.

I have started re-reading one of my favourite books on Indian Economy, “India Unbound”. I had read this book at the time when I had just received my first salary. I must admit that this book has changed the way I look at our country, its economy, its diversity, its irony.

The following is an edited excerpt from this beautiful book.
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"When India got independence, the economists’ main question was not “If India would take off economically” it was “when”. The economists predicted that investment rate would increase by 10-12%. And the investments rate in India was well over 20% for next 2 decades. But we failed to transform the society. Why?
There were six main reasons for this deception. (please note that Action is in bold(how), results of action is italicized and underlined(why), to signify the way we ask questions)

1) India adopted inward-looking, import substituting path rather than an outward looking, export promoting, thus denying itself a share of world trade and prosperity that trade could bring postwar era.
2) It setup massive, inefficient and monopolistic public sectors. The public sectors were denied autonomy, the productivity was very less, the capital-output ratio was poor
3)It over-regulated the private enterprise with worst controls in the world. This diminished competition in the market. Hence there was no reward for innovations.
4) It discouraged foreign capital and denied itself the benefits of technology and world-class competition. We could not advance technologically in many fields of science.
5) It pampered the organized labour to an extent that the productivity was very low. Most of the PSUs are under loss and wastage of taxes.
6) Ignored the education of children especially for girls. No need to say how important it is for us.

The Indian rulers stubbornly persisted with the wrong model of development. Especially during 1970s, it was pretty clear that Indian approach was leading India to complete economic disaster.
It did not encourage growth of industry, denied Indians jobs without which the people could not come out of poverty.
It is very ironic that this order was created by the same people who were admired widely. In the name of the poor they refused change the course. Ultimately this approach did very little for the poor.

Many other countries which were in similar state as India (when it got independence) moved forward, while India was still under the inferiority complex. Eastern countries used better approach to alleviate itself from the poverty. China which was in much more difficulties too improved the lives of its people.
Our failure is not because of bad ideology but was because of bad execution.

How does India compare itself with the rest of the world?
1) India’s percapita income is $450, 162nd in world development report of 2000-2001.
a) In 1960 it was higher than China, now it is less than half of china’s.
b) Now it is $700, that is because of the effects of economic reforms
2) Half of the Indians are below poverty line: less than 1$/day
3) 1/3rd of world’s poor are in India
4) Life expectancy of an Indian is 63 years. Lesser than poorer countries
5) 65/1000 infants die.
6) 2/3rd of Indian children suffer from malnutrition and under-weight.
7) 71% do not have proper sanitation.
8) 4/10 are illiterate.
Therefore India ranked 134th of 174 countries on the UN development Program’s Human Development Index.
Other countries with similar historical and political backgrounds have done much better.

Who is responsible for all these criminal negligence?
Definitely the Indian ruling elite: The politicians, MPs, senior bureaucrats and economic planners
They have no humiliation that India has lagged behind in the list of third world countries, while the east and southeast nations have gone ahead.
They feel no shame that other countries with fractional human and natural potentials have gone on to create prosperous societies.

When individuals blunder, their families would undergo unfortunate sufferings.
But when rulers fail, it’s a national tragedy."
-GC Das, India Unbound
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