How far India has come, and what holds it back

The data is clear on this, though Indians are caught in a battle of political narratives on the country’s reality

- Monika Halan

The view of how we are doing as a nation depends on which side of the political divide you are on.

The further you go in either direction, the starker the difference between reality and perception. When I look at various metrics and their directions, the conclusion that I come to is this: India is doing much better than before on poverty, inequality, growth, per capita income, nutrition and digitisation. It is on a path of compounding that will really show results in the next decade. But there are deep problems that are holding back a move to the next gear to pick up speed. These include deep endemic corruption, lack of judicial reforms, dysfunctional municipal corporations, and a compliance and inspector raj that adds layers of costs in terms of both money and time.

The headlines have told us that we are on the way to becoming the world’s third-largest economy in a few years. We also know that India is the fastest-growing economy in the world with an expected GDP growth of 6.5% in the current year. But per capita income at $2,700 in 2024 makes India stand far lower than the global average. To perceive the direction of change in this metric, we need to see that it has grown at a compounded rate of 7.6% a year for the last 20 years, which is nota bad rate of growth. Expect per capita income to go up sharply over the next decade as the middle-class expands.