What statistics don’t tell

NDA government promised to transform India in 60 months. Forty months down the road, the future looks bleak and bluffing through the jugglery of numbers continues.

Written by Kapil Sibal | Published: October 16, 2017 12:30 am
Narendra Modi, Indian economy, finance ministry, Kapil sibal, India’s GDP, India GDP growth, Prime Minister Narendra Modi, PM Modi, BJP, jobs in India, inflation rate, inflation rate in India, Indian express, express column Ninety-two per cent of those living in rural households (74.18 crore) earn less than Rs 10,000 a month.

Whenever we dwell on economic woes confronting ordinary people and the mess that has set in because of untimely or ill-conceived decisions of the finance ministry, the response we get is: India is the world’s fastest growing economy. As if that washes away the sins of thoughtless policy prescriptions. We are told that India’s GDP is growing at 7 per cent. Is GDP only a number without a human face? If a 7 per cent GDP growth helps in making the rich richer and leaving the poor impoverished, then such rhetoric is tantamount to deception. Any attempt at self-praise by comparing our growth figures with the Chinese GDP is also an act of self-deception. China is a $11.8-trillion economy as compared to India’s mere $2.45 trillion. So if India grows at 7 per cent and China grows at 6.7 per cent, but from a much higher base, to claim that we are the fastest growing economy is, to say the least, misleading. The US with a $19 trillion economy can hardly ever grow at more than 3 per cent. Also in per capita terms, the income of Indians in nominal terms is $1,850; China’s comparative per capita income is around $8,500.

The real question for all economists is to demonstrate how India’s GDP has helped people at the bottom of the pyramid. Now let us look at some numbers. Of the 24.7 crore households in the country, the number of rural households is 16.8 crore and the number of urban households is 7.9 crore. With an average of 4.8 persons living in a rural household, the number of persons living in rural households will be 80.64 crore. Keep in mind that India’s population is almost 130 crore. Ninety-two per cent of those living in rural households (74.18 crore) earn less than Rs 10,000 a month. Of the 37.92 crore living in urban households, 26.4 per cent (10.01 crore) live below the poverty line. Consequently, around 84 crore people in India live life on the margins. The total population of the US and Europe put together is around 75 crore. We should not only be worried for our poor but need to do something radical to bring cheer to their lives — and not resort to empty rhetoric and renaming schemes.

Prime Minister Narendra Modi committed that he would transform India in 60 months. Forty months down the road, the future looks bleak and bluffing through the jugglery of statistics continues. Recently, a BJP leader pegged the country’s growth at 3.7 per cent instead of 5.7 per cent in the last quarter. The government may dispute his claim. Unseemly bickering that reduces the level of political discourse will continue but the reality of the desperation of those who have lost livelihoods and are unable to afford two square meals a day cannot be wished away with vacuous sound bites on television channels. Did the 7 per cent GDP growth have any impact on their lives?

It is ironic that we present a picture of fast-paced economic growth without any reference to the levels of poverty and deprivation of around 85 crore Indians. Not that a large majority of the rest live in luxury. That is limited to a minuscule minority, perhaps the 1 per cent who control 50 per cent of the country’s wealth. The rest include government employees, and the honest among them live very austere lives. They find it difficult to send their children to private schools and when confronted with health issues, they cannot afford the best medical care. Absence of free healthcare and education takes its toll. We, as a society, have been taken over by consumerism and the starry-eyed get seduced by goods and services that are on offer. But they cannot afford such goods and services. That heightens the sense of deprivation, which, in turn, leads to weakening of the moral fibre of middle-class Indians. The result is corruption and increased levels of crime.

Former Prime Minister Manmohan Singh rightly points out that we need to work out a new design for social and economic policies in order to have cohesive and inclusive growth. There has to be a judicious mix of high economic growth and a focus on containing the growth of economic inequalities. A supportive environment that allows us to meet these objectives is, sadly, missing.

We do not have to calibrate our wellbeing by embracing an index of happiness but should evolve a method to gauge levels of dissatisfaction within the multi-layered complexity of deprivation in society. Changing the base year from 2004-05 to 2011-12 and altering the elements that go into calculating GDP do not change the lives of those who fear tomorrow’s sunset. Economists can interpret data any which way they like with conclusions that occasionally defy logic. They speculate outcomes with selective statistics. But they are professionals and their conclusions are subjected to scrutiny. Politicians are least bothered about the veracity of data — they are only concerned with outcomes at the hustings. By lacing data with words, they tend to sell dreams. That is why Napoleon characterised politicians as “dealers in hope”. The poor get taken in and fall prey to empty promises, for in believing them, they have nothing to lose.

As we move forward as a nation, our mantra for delivering a better life must be based on principles of equity. Equity must inform every exercise of societal activity. It should be the fundamental yardstick to analyse the country’s economic prosperity. What use is a number or a statistic if it does not touch the life of the aam aadmi? The poor cannot consume statistics but will find comfort if these statistics enhance the quality of their lives. A GDP growth of 7 per cent has no perceptible impact on the 85 crore people at the bottom of the pyramid. The fastest growing economy is not fast enough. The pace of poverty and deprivation is moving faster.

The writer, a senior Congress leader, is a former Union minister.

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More From Kapil Sibal
  1. G
    Oct 23, 2017 at 11:05 am
    The comments here prove that congress has no skope or future left in this country.They have looted the country for several years and want another chance to do the same.The state we are in at the moment is because the country's people gave chance to the Congress to govern this country.And just look what they have done.They looted the country for 60 years and still want their hands on.No chance Mr Sibal.We want Mr Modi to lead this country so atleast we have a chance to reach at the point where we should have been many many years ago.Jail these s.
    1. M
      Oct 23, 2017 at 10:49 am
      We were so hopeful and believe every word of Modi and voted him . But now .. not only the poor , other than Ambani ..Adani and big shots even well to do people are gasping to cope with these increased price of everything .. what a mess Modi has made with all Indians life irrespective poor.. middle class upper class ( not the super rich) ! The super rich is becoming richer .. all business are almost finished .. what a future of India !!! Mr Arun Jailty is a cons utial lawyer .. does he understand Finance a bit ? It’s highly alarming .. only vote and Gaddi if the motto .. who talks against Modi wil be finished .. this is a maddening .. every post needs some basic background and education .. we will remember this next time definitely ...
      1. A
        A Dias
        Oct 18, 2017 at 9:04 pm
        It is sad that people do not focus on the points made in the article, preferring instead to berate the author for the shortcomings of his party. However poor the performance of the Congress may have been that is not the point here. The fact is that the BJP government has not delivered on it's promises and their economic choices seem to be very poor and more focused on political results than improving the lives of the poor. Some of the promises should never have been believed (Rs.15 lakhs in your account, really?) but such is the faith of the electorate in politicians. As the author rightly points out, we are busy congratulating ourselves for having beaten China by fractions of a percentage in the growth rate, which is meaningless when you consider that China has a GDP almost 5 times ours. We will not catch up in a hundred years!
        1. C
          claire smith
          Oct 17, 2017 at 5:48 am
          God forbid if author of this article were to change his vantage point (i.e. if he were to join BJP) he will claim "40 months on India is truly on path of transformation". Joyful thing is that in opposition congress is as awful as it was in government.
          1. V
            Oct 17, 2017 at 4:23 am
            Kapil Sibal has become restless at the slow progress in 40 months of BJP rule. I wish Mr. Sibal and his friends has been as energetic during the 60 years (720 months) of Congress rule. Then we would not be so far behind China. One wonders how much money is ever enough for these Congress leaders. How much more blood do they want to suck from the poor before their thirst is quenched!
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