It is not that India has not been progressing. But we are simply running to stay in the same place.
Where we stand globally is one way of looking at it.
At the time of independence, our GDP stood at 9th place. Now we are at 6th place.
Most important is GDP per capita. From 97th rank in 1960, we are now at 147th. The 147th rank not only indicates how poor we are; given the huge inequality, probably 80% of the population is simply struggling to survive.
As I pointed out the other day, even if you adjust for Purchasing Power Parity, our rank is still 125th.
We have completely missed the manufacturing bus. In 1950, manufacturing was 12% of GVA and now it is 14%.
Except for Tamil Nadu and Gujarat, where manufacturing is growing on par with how China used to grow in its peak years, our manufacturing story is yet to begin.
Lee Kuan Yew once said:
“India cannot grow into a major economy on services alone. Since the industrial revolution, no country has become a major economy without becoming an industrial power.”
What was obvious about India to Singapore policymakers did not hit the vision of our policymakers.
Our share of global merchandise exports was 1.85% in 1950. After 75 years, we are still stuck at 1.69%.
And for nearly the last five decades, our GDP per capita growth has been only around 4.5% annualised, barely sufficient to move the needle from such a low base.
That is why we are still at $2,800 GDP per capita, a low income country ranked 147th globally.
The Centre and every single state have an enormous amount of work to do in numerous areas. This is not to become a superpower or a rich nation, but to achieve a decent GDP per capita of $10,000 around 2050.
As I pointed out the other day, despite whatever narrative we set, the crux is this:
During the last 12 years, our GDP has just doubled and our GDP per capita has not even doubled.
Those who ask why we should look at the numbers in dollars need to understand that the exchange rate itself reflects productivity, competitiveness, and capital flows.