Daily Times

“It is a shining facade with human development lagging behind.” India’s economic story is often painted in vibrant hues. For decades, the nation has enjoyed impressive GDP growth, consistently ranking among the fastest-growing economies globally. India’s average growth rate over the last decade has been about 7 percent while China’s growth in comparison has been falling over the years.

Many experts call the current 5 percent growth target ambitious and without necessary structural reform may subside to 2.4 percent by 2035. India has been growing faster than China since 2010 and has already overtaken the UK, France, Italy, and Brazil in GDP size. Modi’s “India First” has been no wonder a successful election slogan and he has shown economic prowess, but this self-reliance mantra is concerning. This economic boom has propelled India onto the world stage, attracting foreign investment and fostering a burgeoning middle class. However, beneath this glittering facade lies a harsher reality – a significant lag in human development and a persistent struggle with poverty alleviation.

India’s economic rise is undeniable, but it remains cosmetic and superficial because true progress hinges on prioritizing human development.

China, often used as a benchmark for rapid development, provides a stark contrast. While India’s economic growth has been undeniable, its human development index (HDI) – a composite metric measuring life expectancy, education, and standard of living – remains considerably lower than China’s.

The Challenges of Uneven Growth & Income Inequality:

India’s economic growth has been primarily driven by the service sector, particularly information technology (IT). According to the National Association of Software and Service Companies (Nasscom) this expeditious revenue growth will slow down at a 3.8 percent to $253.9 billion, compared with the previous fiscal year’s 8.4 percent. NASSCOM also revealed a decline of 3.3 percent (to $199 billion in India’s software exports (comprising of services & products) compared with the previous year. Simultaneously the IT industry total headcount increased to 5.43 million and is expected to add 60,000 jobs on a net basis, a nearly 80 percent drop from the previous year. The explosive growth in the IT sector created pockets of immense wealth for the country, but the benefits haven’t trickled down effectively.

Furthermore, India grapples with significant income inequality. India’s economic boom has been accompanied by a worrying trend of rising income inequality. A recent study by World Inequality Lab (WIL) paints a concerning picture. The top 1 percent of income earners in India now corner a staggering 22.6 percent of national income, the highest level since records began in 1922. This translates to a situation where the richest 1 percent control more wealth than the bottom 50 percent of the population combined. Furthermore, Oxfam India reports that the top 10 percent hold a staggering 77 percent of the total wealth, highlighting the stark concentration of resources at the very top.

Education: A Pathway Unpaved:

Education, a cornerstone of human development, remains a challenge in India. The Annual Status of Education Report (ASER) 2023 paints a grim picture. In rural India, only 57 percent of students in grade 5 can read a grade 2 level text fluently, indicating a critical gap in basic literacy skills. Furthermore, a report by the National Council of Educational Research and Training (NCERT) suggests nearly 40 percent of teachers in government schools lack the necessary qualifications. This translates to classrooms with large student-teacher ratios and rote learning methods, hindering critical thinking and fostering a gap between education and the needs of the job market. Furthermore, the education system often fails to equip graduates with the skills needed for the modern workforce, leading to unemployment and underemployment, particularly among the youth.

Healthcare & Gender Gap: A System Under Strain:

India’s public healthcare system is overburdened and underfunded. Limited access to quality healthcare, particularly in rural areas, leads to preventable illnesses and hinders life expectancy. The COVID-19 pandemic exposed these vulnerabilities, highlighting the need for a robust and accessible healthcare infrastructure.

At the same time, India’s social fabric remains deeply patriarchal. Gender inequality permeates various aspects of life, from education and employment opportunities to healthcare access and decision-making power. Empowering women through education and fostering gender equality are crucial for overall human development.

Poverty Alleviation: A distant thought:

In India, poverty reduction efforts have focused on social safety nets and rural development schemes. The Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), for example, provides temporary wage employment in rural areas. On the other hand China’s focus on rapid economic growth, particularly in the manufacturing sector, created employment opportunities and lifted millions out of poverty. India’s social safety net programs provide some support but haven’t driven the same level of economic transformation. Unlike China’s targeted poverty alleviation strategy that focused resources on the most impoverished regions, ensuring a concentrated impact. India’s social safety nets, while widespread, are less effective in reaching the most vulnerable. Bureaucracy, corruption, and leakages in program implementation further hinder the effectiveness of these efforts.

India’s economic rise is undeniable, but it remains cosmetic and superficial because true progress hinges on prioritizing human development. These statistics expose a deep chasm in Indian society, where the economic gains haven’t been shared equitably, leaving millions behind and hindering true progress. This skews social indicators, as the average improvement in health, education, and living standards masks the plight of millions living below the poverty line.

The writer is Foreign Research Associate, Centre of Excellence, China Pakistan Economic Corridor, Islamabad.