What is the path of developed India?

Ever since the slogan of ‘Developed India by 2047’ has been given, there have been debates on how the country can become prosperous. There is a debate going on all over the world on how a country becomes rich. The reason for this is that there are only a few prosperous countries in the world and around them there is a gathering of countries that are struggling.

The World Bank has divided various countries into the categories of low income, low-middle income, high-middle income and high income. According to it, 58 countries in the world come in the category of high income but there is a lot of difference among them.

India has been placed in the low-middle income category, which includes a total of 52 countries. After these, 54 countries are high-middle income. In short, except for small islands and tax havens, 70 percent of the world cannot be called rich.

This means that no country becomes rich because of any rule, rather wealthy countries are exceptions. Can India leave the past behind and join the ranks of developed countries?

The past shows that in the last 80 years, most countries have been able to move up only one rung on the income ladder. The countries that are rich today have been able to do so since the beginning of the 19th century. Yes, they have to be given credit for being prosperous even today.

The truth is that just as the countries of Western Europe did not slide down to the middle income category, it has been almost impossible for low income countries to jump to the high income group.

After the Second World War, there have been only four countries whose economy grew so fast and kept running for so long that they overcame the horrors of war and brought themselves into the group of prosperous countries. The countries that have transformed their fortunes through their resilience are Taiwan, South Korea, Japan and Singapore.

China is still not a prosperous nation. It is in the upper-middle income category. Its growth has slowed and it is struggling to escape the middle-income trap. Some countries have moved up a little and reached the upper-middle income category, but they have not yet achieved the status of being called developed.

So why do we believe that India can achieve what Malaysia, Indonesia, Thailand, South Africa, Turkey and Mexico have not been able to?

The model that best solves the problem of rapid economic growth is a certain form of economic nationalism, in which new industries are protected to expand, the best technology is imported and competition is increased within the country to become the export leader.

This is a common factor in all four of the major economies that achieved exceptional growth in the 20th century. The most important element of this model is the elimination of failing institutions, whether public or private, so that only those institutions remain in the market that can compete, along with great innovation.

The reality is that all countries have tried to adopt this economic policy. But most have implemented it half-heartedly or indifferently. That is why they have failed to achieve high growth rates.

India had industrial protection, but until 1991 there was little or no competition within the country, which caused it to fail to achieve high growth rates. India adopted a fair model of development of backward areas. India started export processing zones but could not scale them up with the vigour that China did. India opened their doors to foreign technology but did not adopt a concrete policy to strengthen the local export chain.

The most important point is that no policy can be perfect. There is always a flaw in the beginning. In real life, we need accountability, honest feedback and rapid improvement as needed. This is what determines victory and defeat.

When inefficiency and corruption started creeping into India’s planned economy, no reforms were done, inefficiencies were not eliminated and good work was not encouraged. The sad thing is that we have still not found a solution to this.

D.Basu

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