The purpose of economic growth

Many of us who follow development space are more or less familiar with China’s lead over India in development indicators such as life expectancy (74 vs 64), adult literacy (94% vs 74%), infant mortality (17/1000 vs. 50/1000) and mortality of children under five (19/1000 vs 66/1000).

Amartya Sen, in his recent article titled “Quality of Life: India vs. China” in the New York Review of Books says:

“Higher GNP has certainly helped China to reduce various indicators of poverty and deprivation, and to expand different features of the quality of life… GNP per capita is, however, not invariably a good predictor [my emphasis] of valuable features of our lives, for those features depend also on other things that we do—or fail to do.”

He then goes on to compare Indian development indicators with Bangladesh, a country with half the per capita GNP of India, a difference that has been growing due to India’s more rapid growth.  India is same or lower in many indicators: life expectancy (India: 64, Bangladesh: 67), infant mortality (India: 50/1000, Bangladesh: 41/1000), mortality of children under five (India: 66/1000, Bangladesh 52/1000), even higher female literacy.

He says that “there is much evidence to suggest that Bangladesh’s current progress has a great deal to do with the role that liberated Bangladeshi women are beginning to play in the country.”

In contrast, the Indian intellectuals often focus on competing with China on annual growth rates, rather than what the growth rates mean for the country.

“What a democratic system achieves depends greatly on which social conditions become political issues… A fuller understanding of the real conditions of the mass of neglected Indians and what can be done to improve their lives through public policy should be a central issue in the politics of India.

In his article, Amartya Sen is concerned that this “relatively prosperous” group of individuals (business leaders, senior professionals, many intellectuals) is mostly preoccupied with achieving high economic growth because they are best positioned to benefit from it.

I would go a bit further and claim that this relatively prosperous group believes that they are right in doing so, that their needs represent the needs of all Indians, at least all middle-class Indians, and therefore attempt to influence public policy accordingly.

At my previous employer (a top-tier IT company), I often met people who would fall in the top 1% of income bracket in India. When discussing their lives, concerns and expectations from the government they stated their concerns as “middle-class” concerns.

Similarly, a vast majority of what Indian newspapers call middle-class people (business leaders, professionals and elites) are quite far from being in the middle of economic and social strata. The country would benefit from the “relatively prosperous” climbing out of their self-delusion and acknowledging that their needs and expectations from the government (and public policy) may not be representative of the vast majority of Indians.

This would be a first step in moving the national agenda towards what Amartya Sen advocates:  Making a fuller understanding of the real conditions of the mass of neglected Indians and what can be done to improve their lives through public policy a central issue in the politics and public policy of India. 


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