Friday, January 17, 2020

We know the answers, but don't want to know them.

"If we assume that World Bank thresholds and India's income per capita grow at the same pace as they have in the past 30 years, it will take India until 2038 to reach the lower end of the upper middle-income threshold. Similar data crunching reveals that even in 2050, India would be well below Brazil, and South Africa. Korea and China would be in a different league altogether," wrote Salman Anees Soz. Member of the Prime Minister's Economic Advisory Council (PMEAC) Rathin Roy said that India is facing a middle income trap. "Since 1991, the economy has been growing not on the basis of exports but on the basis of what the top 100 million of the Indian population wants to consume," he said. They are maxed out now. "Prime Minister Narendra Modi's clarion call for reaching a $5 trillion economy by 2024 may or may not be realised, but a $10 trillion economy in the early 2030s is a near certainty," thinks R Jagannathan. Why is China so much richer? "The difference was the one big thing despotic China got right before 1980 -- much better literacy and health." "At least 25% of school children in the four-eight age group do not have age-appropriate cognitive and numeracy skills, making for a massive learning deficit at a very early stage, according to the Annual Status of Education Report (ASER) released on Thursday." 43.2% of girls were enrolled in private preschools or schools compared to 49.6% of boys, when studies have shown that educated mothers have better educated children. A survey by the National Statistical Organisation showed that "only 10.6% of the Indian population aged above 15 years has successfully completed a graduate degree. The proportion is only 5.7% in rural India and is 8.3% among women," wrote Ishan Anand. "India needs very deep reforms and steady growth to even get into the upper middle-income category, which is where the middle-income trap problem typically arises," wrote Ajay Chhibber. Even if we become a $5 trillion economy we will still be low-income. The present drop in the growth rate of the GDP is nothing unusual, wrote Prof A Panagariya. "Since 1991, when systematic economic reforms were launched, the economy has oscillated between periods of high and low growth with the latter lasting two to three years." Our growth rate is never going to reach 7% and above, thinks Ruchir Sharma. "Like every country in the world, India needs to lower its expectations, and to recognise that for low income nations a 5% growth rte is the new benchmark of success." History would agree growth over 5% will be difficult, agreed Vivek Kaul. "That is how brutal life can be in the field of development," wrote Soz. Especially with this lot.

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