India’s Amrit Kaal goal calls for broad trackers
Narendra Modi envisioned India as a developed country by 2047 to mark a century of freedom. He called the next 25 years an “Amrit Kaal," a propitious phase for the fulfillment of this ambition. As the emergence of our economy is a necessary—if not sufficient—condition for it, output per head would suggest itself as the gauge to adopt.
Work published by the Reserve Bank of India (RBI) recently said that for our pie of income to reach a size that today’s World Bank yardstick would slot as ‘high income’ in fiscal 2047-48, it must expand to $35 trillion in nominal value from the $3.4-trillion-odd we expect logged in 2022-23. While volatile inflation and dollar rates could warp the actual story as it pans out, the RBI note sets out a rough pace at which real GDP in Indian rupees would have to grow: an average of 7.6% annually, i.e., without a let-up. This is doable.
As theory and Asian Tigers show, economic policy aligned with nothing more astral than the global market reality of today’s geo-times could tilt the odds in India’s favour. What we must not lose sight of in this quest for success is what GDP per head may mask as a tracker of progress. While a rising tide of value generation should lift all boats, we need to keep track of what people actually earn, too.
As average earnings are skewed by what the few on top take home, a median level that splits earners into upper and lower halves would better reveal what’s typical. Since income tax-filers offer only a better-off sample (of 68 million last year), however, we have no firm data to go by. Surveys give us snapshots that are indicative at best.
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