Angus Maddison has noted that India was the richest country in the world and had controlled a third of global wealth until the 17th century. The village was the centre of a rural economy that was an economic powerhouse of entrepreneurialism. The British Raj almost dismantled this system however by introducing mono crop activities and mill made products, and post independent India has failed to repair the economic fabric.
If anything implies that India’s social and economic fabric requires restoring, it is the findings of the 2014 global MultidimensionalPoverty Index. Out of its 1.2 billion-plus population, India is home to over 340 million destitute people and is the second poorest country in South Asia after war-torn Afghanistan.
Some 640 million poor people live in India (40% of the world’s poor). Just 20 years ago, India had the second-best social indicators among the six South Asian countries (India, Pakistan, Bangladesh, Sri Lanka, Nepal and Bhutan). Now it has the second worst position, ahead only of Pakistan. Bangladesh has less than half of India’s per-capita GDP but has infant and child mortality rates lower than that of India.
What is going wrong?
Former Indian Finance Minister P Chidambaram once claimed that his government’s economic neoliberal policies were pro-growth and pro equity and envisaged 85% of India’s population eventually living in well-planned cities. That would mean at least 600 million moving to cities. He stated that urbanisation constitutes ‘natural progress’. After 24 years of a shift towards neo-liberalism and increasing urbanisation, to what extent has the process thus far been ‘pro-equity’ or ‘progressive’?