Dismal economic show will hit India’s standing
The latest IMF economic growth/contraction projections come as a shocker for India. Not only is our nation below the average global contraction, it is substantially poorer than her regional peers. That the opposition is rubbing salt on open wounds has made the government’s discomfiture worse.
The IMF has predicted a global contraction of 4.4% for 2020. In comparison, India’s economy will shrink by 10.3%. China, with which we aspire to compete, has bounced back and is expected to grow 1.9%. The only consolation is India’s rebound next year, according to the IMF, will be 8.8%—higher than China’s 8.2%. The regional comparison shows Bangladesh, a nation we liberated, pulling ahead of India.
While Bangladesh’s per capita GDP in dollar terms is expected to grow 4% in 2020 to $1,888, India’s 10.3% decline will take it down to $1,877, the lowest in four years. Bangladesh’s per capita GDP was nearly 40% lower than ours just five years ago.
The secret of the turnaround has been its aggressive export policy in low-skill sectors that other nations shunned. Shoes and apparel factories don’t add huge value, but they create millions of jobs. Bangladesh’s per capita GDP has been growing at 9.1% annually, while India’s exports have been stagnating.
The main reason for India falling back is undoubtedly the economic freeze due to the Covid lockdowns. India has logged over 1 lakh deaths to the pandemic while Bangladesh, albeit one-eighth of our population, has recorded fewer than 6,000 deaths. It is no secret that Bangladesh has an efficient and far-reaching public health system. In tackling Covid, ours is a failure.
One doesn’t need an oracle to tell us that poor economic performance has a telling impact on how the world sees India. Global leadership is still far off; now, it may be difficult to assert our own in regional leadership. It is time the Centre steps in and reverses this trend. Rapid, export-led growth that will expand labour participation and employment is the need of the hour.