India’s 8.2% GDP growth: We still have a long way to go

livemint.com:

7.8%, taking the annual figure to a neck-turning 8.2%. Internationally, there is growing optimism that India is on the cusp of a long-awaited economic take-off, as evidenced by the recent revision in our sovereign-credit outlook from ‘stable’ to ‘positive’ by S&P Global Ratings, even if the actual credit rating remains barely investment grade (for now). While revising India’s GDP growth upwards by close to 2 percentage points for 2023-24, the International Monetary Fund’s (IMF) April 2024 World Economic Outlook alludes to the robustness of growth expected in 2024 and 2025 as “reflecting continuing strength in domestic demand and a rising working-age population." It may be tempting to conclude from all this that India has reached what development economist W.W.

Rostow called the ‘take-off’ stage. And to fondly imagine that from here, it is only a “hop, skip and jump away" to the next two stages: the “drive to maturity" stage and the developed one of a “high mass consumption" economy. Unfortunately, this remains wishful thinking.

We have a long way to go. For all the pride we can justifiably take in India having become the world’s fifth largest economy (and IMF projections of becoming the fourth biggest by 2025 and third by 2027), the reality is that when it comes to per capita income, we are close to the bottom of the global league tables, at No. 144.

Yes, this is an improvement from our rank of No. 153 in 2018, but it is nowhere near good enough if we are to lift our people out of poverty and give them a decent quality of life. It is a sobering thought that in per capita terms, it is only by 2029 that India is forecast to overtake countries like Uzbekistan, Papua New Guinea and Angola.