India to become a ‘developed’ nation by 2047? It's a new pipe dream

In today’s unpredictable and fast-changing world, projecting the future five years ahead is fraught with challenges. Who could have foreseen the Covid pandemic in 2020 and the war in Ukraine in 2022?

Yet, the prime minister has set a goal for India to become a developed country by 2047. On the way, India’s gross domestic product (GDP) is going to surpass those of Germany and Japan, that is, if the current official rates of growth are maintained.

The successful landing of Chandrayaan-3 near the south pole of the moon is undoubtedly a great achievement for the nation. But that does not make India a developed nation.

Major challenges confront the nation, such as providing good education and healthcare. This can only be achieved if the numbers of schools and health facilities in rural and semi-rural areas are increased substantially.

The success of the Indian Space Research Organisation (ISRO) shows that India can achieve much more if it sets its mind to it. ISRO’s success also implies that even though we focus on going to the moon, we neglect day-to-day things that are necessary to become a developed nation—like providing clean drinking water and sanitation to all.

Assuming nothing untoward happens on the road to 2047, our official GDP will keep rising. Before the pandemic, the official growth rate had dropped sharply from 8 per cent to 3.9 per cent, for an average of 6 per cent.

If the growth rate continues to hover around the 6 per cent mark till 2047, India’s GDP will become 4.05 times the current official GDP of US $3.7 trillion, that is, $15 trillion; but it will still be behind the current GDP of the US ($25 trillion) and China ($18 trillion). It is safe to assume that the world’s two largest economies would also continue to grow over the next 24 years, thus pulling well ahead of India.

India’s population is expected to reach 1.65 billion by 2047; so the per capita income will become $9,000 by that year. The current World Bank benchmark for a high-income country is a per capita income of $14,000. So, India will only transition from a lower middle- to an upper middle-income country. Only if the average rate of growth becomes 8 per cent now will the per capita income reach $14,000 by 2047.

Growing at even 6 per cent over 24 years will be a challenge, however; 8 per cent appears to be a far-fetched dream. The current high levels of inflation, the slow growth of major world economies and supply bottlenecks will certainly be major impediments in achieving even a 6 per cent growth rate. Further, current policies that marginalise the unorganised sector will need to be changed substantially to facilitate growth.

Even if India’s per capita income does become $14,000 by 2047, would that make India a developed nation? Oil-producing nations such as Kuwait and Brunei have for long enjoyed high per capita incomes.

They are characterised as rich countries but not developed nations; because a developed nation is one that is technologically advanced and is able to move along the technology frontier to stay competitive. It has to be dynamic in taking care of its problems and has to be able to compete on equal terms on the global stage.

India does not fit that bill, as it is heavily dependent on the import of high-tech products. Granted it has done better than most developing nations, but it mostly functions with intermediate and low technologies. India mostly exports low value-added items while importing higher value-added items. The result is a large trade deficit.

Countries that possess superior technology do not share it. So India has to develop it on its own.

Multiple factors underlie technological dynamism. First, as data from the Annual Status of Education Report (ASER) shows, the quality of school education is not very good. On the other hand, only a few institutions of higher learning are involved in advanced research.

Poor school education results in a weak base, which makes students less capable of undertaking advanced research. Sub-standard advanced research means both educators and the knowledge base for school education continue to be of a deficient quality.

Second, given India’s poverty (India is the poorest G20 nation), adequate expenditure on public education is a crucial factor in nurturing talent and for employing talented researchers and teachers.

Third, commitment is crucial for good teaching and research, and that to a large extent depends on society’s commitment to promoting knowledge generation. Fourth, technology itself creates multiple possibilities at the technical and social levels, which makes it impossible to plan the future precisely.

Before 2000, people wrote letters and sent telegrams, but that is largely history now. People then visited a bank for transactions, but now they are carried out via the internet and ATMs. E-commerce has spread, to the detriment of the neighbourhood stores.

As of 2022, ‘large learning models’ are posing an unprecedented challenge. Large learning models are a fundamental algorithm in generative artificial intelligence (AI) that have transformed the AI development landscape, providing developers with unparalleled capabilities in a fraction of the time previously required.

Even those who are at the frontiers of AI are asking for a moratorium on further research because it poses an existential challenge to human kind. AI, automation and mechanisation are not only posing challenges to semi-skilled workers but also to skilled workers. It is said that in five years, many more skilled jobs such as those of teachers may be impacted by AI.

Technology development requires investment in research and development (R&D). But it is risky because there is no guarantee of success and there is a chance of obsolescence due to the acceleration of technical change. So investors may not be able to recoup the investment made.

Investment in R&D is even more risky in developing countries. Their R&D efforts may be undermined by import of more advanced technology. This has repeatedly happened in India with nascent R&D nipped in the bud.

The efforts of the Centre for Development of Telematics (C-DOT) were undermined by the import of the large digital exchanges in the early 1990s. The role of policy is crucial in promotion of R&D.

It can provide a stable environment and public funding. This requires the nation to have a strategic vision that can help identify the sectors to be defended against external pressures and those that can be let go.

A strategic vision requires a political consensus. In the prevailing environment of cronyism, consensus has proved to be elusive since suspicions run deep. A new vision must take into account the concerns of the marginalised sections that may be adversely impacted by technological changes.

Given the aforementioned factors that create considerable uncertainty and make it difficult to plan ahead, the best we can do is learn to cope with rapid changes.

Technology is knowledge. Its advancement requires the generation of new knowledge. This happens largely in institutions of higher learning and during production. Typically, the latter depend on the former to produce new knowledge which can be commercially exploited. Take, for instance, the development of vaccines against coronavirus or of advanced semiconductor components for faster computers and mobile phones.

Society needs to create an environment for innovation and new knowledge generation. This can only happen when researchers are given freedom to generate new ideas, that is, autonomy to pursue ideas even if they fail. The success of Chandrayaan-3 was based on the learning from the failure of Chandrayaan-2.

Truncating autonomy through bureaucratic control frustrates researchers and kills their initiative, which undermines the creation of new knowledge. Unfortunately, very few institutions of higher learning and research provide teachers and researchers with the autonomy they need.

India may do well in select areas, like space exploration, but it is not doing well in general, and that makes the task of becoming a ‘developed’ country difficult even with a higher per capita income.

(IPA Service. Courtesy: The Leaflet)