Is India a poor country 2


Bernard Imhasly

To person

Born in 1946; from 1989 to the end of 2007 correspondent for the "Neue Zürcher Zeitung" and the "taz" in New Delhi.
Email: [email protected]

Despite a slight upward trend, three quarters of Indians live in abject poverty. India's rise will only be of value if the country takes its poor "on board".


Long years ago, India's Prime Minister-designate Jawaharlal Nehru said on the eve of Independence Day on August 15, 1947, "India made a promise to Providence". Now the moment has finally come to redeem it. The agreement was to "liberate the country from poverty, disease and need (...), not completely, but to a large extent".

Did India keep its promise? Sixty years or three generations later is a good time to ask the question. The answers vary depending on the yardstick the observer applies. From an economic history perspective with a reference period of one hundred years, the progress is remarkable. Average annual growth, which had been 0.79% in the first half of the 20th century, the last phase of colonial rule, accelerated five-fold in the second half. And despite the three-and-a-half-fold increase in the population, the national wealth has grown ten-fold in real terms. At the same time, this huge and heterogeneous country has remained the one with the greatest possible political stability of all developing countries. And not under the thumb of an autocratic regime, but thanks to the free democratic decision of its citizens. India paved the way for decolonization and became the co-founder and draft horse of the non-aligned countries, the first political movement of the "Third World", which at least partially withdrew from the Western economic ideological discourse, be it in its market economy or in the communist form. It lost this international leadership status halfway and only today is it in the process of reclaiming it - by virtue of its economic power - but at the expense of the claim to a "third way".

The development dynamic accelerated again significantly after 1990. And due to the first wave of economic reforms, there has been another leap in growth in the past half decade. Numerous observers claim that India has changed more in the past five years than in the previous fifty years. The per capita income has almost doubled - the first doubling took 19 years. Savings and investment volumes have risen from 27 to 34%, and the poverty rate has fallen by a third, even if the figures fluctuate widely. Seen in this light, the dynamization of the economy has done more to fight poverty than the billions that the Indian government - and the international aid community - have pumped into development aid over fifty years.

A year ago Indian newspapers reported a new milestone: economic output - the gross national product - had reached one trillion or 1000 billion US dollars. This makes India only the twelfth country in the world to have jumped this hurdle. At first glance, this is nothing world-shattering, because again it is the law of large numbers that essentially justifies this achievement. Almost 1.2 billion people now live in India, making every sixth citizen of the world Indian. So you only have to divide the 1,000 billion by the population to get a much more modest result: around 833 US dollars - the average annual income of an Indian. Both numbers indicate the size and borders of that country. After all, it has cleared another hurdle. If the growth of 8.5% is extrapolated to the year 2008, it no longer belongs to the category of the "poorest countries", ie those which, according to the World Bank, have an annual income of less than 842 US dollars per capita. Does this mean that India is "off the hook" and on the best way to becoming a welfare state of the western kind, if not an economic and political superpower? Anyone following media coverage these days could get the impression that this is only a matter of time, and that this time is closer than we commonly assume.

You just have to project the enormous growth into the future, and you are at the forecasts of the American Citibank, which three years ago set up the following scenario for the four BRIC countries - Brazil, Russia, India, China: will be in fifty years India ranks third in the world's largest economies after China and the United States. That study assumed an annual growth of 6%. Since then, however, the country has grown by 8.5% every year, and if it maintains (or even expands) this growth, India will also overtake the US and take second place behind China. At 1,800 billion US dollars, the market capitalization of the Indian stock exchanges is already well above the national product. Foreign investment is still far behind that of China, but it increased a hundredfold between 1991 and 2006 - from 150 million to 15 billion US dollars.

But as always with large numbers and economies, the relative sizes are often more important than the absolute ones. In March 2008, the American business magazine "Forbes" estimated the number of Indian dollar billionaires at 54 - more than Japan has to offer. Their assets totaled almost 250 billion US dollars. Put simply, over a fifth of the total national wealth of this billion people is claimed by a tiny minority. If this large piece of kitchen is removed and the rest is distributed among the 1.2 billion people (minus 54 people), the per capita wealth decreases rapidly and is only around 600 US dollars per capita per year. That means almost two US dollars a day, which would put India back among the poorest. The old cliché of India as the land of contradictions still applies, and with it the question of whether the glass is half empty or half full.