Source: TW
In the year 1952, when Pandit Jawahar Lal Nehru comfortably settled on the throne with his southern necessities, we had a GDP per capita of $1499 in today’s USD. It nearly halved by the year 1960 to $863.+++(5)+++ It was a hopeless basket case for decades.
Post-1990s reforms, we started bouncing back. Bounce back we did; by 2007 we finally surpassed the feudal British Raj-era GDP per capita - a number from a time when our literacy rate was just 16%, we had just endured a messy partition alongside an all-out war for Kashmir, and just a few years prior we were forced to fight a world war on behalf of the Englishmen in Europe, Africa and East Asia!
It was little in the grand scheme of things, but it was a glorious time. We really started recovering. Real effects could be seen post-Kargil war during the Vajpayee era. Per capita GDP was showing double-digit percentage gains! And we pushed back strongly from the financial crisis of 2008.
This growth was so strong that the UPA got re-elected. Everybody was optimistic; magazines were covering India as they did Japan two decades earlier. As a kid in high school, I still remember how optimistic the newspapers were. Every day the newspapers would show the grand elevation of people out of poverty, increases in per capita incomes, and booming IT and real estate sectors!
My generation was sold on the idea of India - a place where dust would become gold. Had we continued on the path between 2000 and 2010, we would now have a GDP per capita of $6,500-$7,000 - a really respectable level, increasing prosperity for the average person by nearly 4-5 times that of the Raj! But it didn’t happen. From 2010 to 2023, nearly a decade and a half, we barely went from $1,905 to $2,600, a shameful 36% increase.
England had a GDP-per capita of USD (2023) $2,665 in the year 1668. ~90 years before the battle of Plassey. We have it in 2023, full 3 centuries and a half later.+++(5)+++ It is time to question the narrative we are being fed. 1668 was full century before the start of the Industrial revolution. King Charles II was the ruler of England as a virtual absolute monarch. Feudalism was the name of the game. Before electricity, modern infrastructure, railways, medicine, and obviously internet and air travel. This is scope of the situation we are in right now, that we find competition in feudal England.
Much of this could be blamed on the massive corruption and mismanagement of the UPA-2 government. It didn’t follow up with reforms at all. 2010 to 2014 was a disaster. The first term of Narendra Modi saw massive improvements over UPA-2. But the early reform momentum started to slow by late 2018 and by the time COVID hit, we were looking at a lost decade and a half - lost opportunities and crushed dreams for millions.
What does this all say? Economic productivity per skilled worker has collapsed massively since the Raj era. We have made massive improvements in nutrition, education and healthcare. We have also built significant infrastructure, but we are unable to equip the workforce with economically productive skills. Our workforce is simply not generating value. Pound for pound, British Indian skilled labour was 4-5 times as economically productive as today’s Indian skilled worker.
To reverse this decline, we need to take several actions:
- Ban political parties from promising freebies the state can’t realistically afford, with harsh sentences including bans and jail time for violating leaders. Since UPA-2 there has been an arms race of unaffordable freebies that must be curtailed. The opposition, seeing no way to beat the NDA’s financial muscle, tries luring voters with freebies and more reservations. This must stop before it is too late - there is no wealth to redistribute, only misery.
- Incentivise foreign and Indian companies to hire less-skilled workers and train them on the job. Cut taxes or even introduce negative corporate taxes to achieve this. Productivity of the Indian worker must increase significantly.
- A government-sponsored accelerator, like Y Combinator, for pre-seed and seed startups across sectors. Include support for further foreign funding and workforce upskilling clauses. This will bring foreign capital and skills into India’s ecosystem. Curb real estate speculation by closing cash investment loopholes. Incentivise the stock market and angel investing, penalise unproductive areas like real estate.
We have a pandemic of unproductive workforce. If unchecked, by current trajectory it will take 30-40 years just to reach $8,500 per capita income in 2023 USD. No patriot wants to see India in that position.
1921, when the first world war has ended for good, and there was a time to settle down, England had GDP per capita of $8126. India was already unprofitable for them. They reach $50,667 in 2007. Yes, their wealth is not our gift to them. It is a myth.
Late Colonial unprofitability
Colonial enterprise was a massive burden on Britain. They barely reached 14000 USD per capita income (in 2023 numbers) in 1952 against Indias 1500. 9x difference. For Context, US was already massively ahead of them at $27,272.
They are $48,913 today despite recent struggles, full 19 times ahead of us! The gap became twice since they got rid of us. While we didn’t even double from 1952, they 3.5x their per capita GDP.
Much of the myth around we wuz victims would disappear once we start adjusting numbers for inflation, so it become apple to apple.