India is booming, yes. But behind the GNP figures, the people of India do not enjoy much of this new wealth. Professor of Economy, and Nobel Prize Winner in Economics in 1998, Armatya Sen explains why India is still far behind… China. What’s wrong with the Indian GNP? 

The steadily rising rate of economic growth in India has recently been around 8 percent per year (it is expected to be 9 percent this year), and there is much speculation about whether and when India may catch up with and surpass China’s over 10 percent growth rate.

Despite the evident excitement that this subject seems to cause in India and abroad, it is surely rather silly to be obsessed about India’s overtaking China in the rate of growth of GNP, while not comparing India with China in other respects, like education, basic health, or life expectancy. Economic growth can, of course, be enormously helpful in advancing living standards and in battling poverty. But there is little cause for taking the growth of GNP to be an end in itself, rather than seeing it as an important means for achieving things we value.

It could, however, be asked why this distinction should make much difference, since economic growth does enhance our ability to improve living standards. The central point to appreciate here is that while economic growth is important for enhancing living conditions, its reach and impact depend greatly on what we do with the increased income. The relation between economic growth and the advancement of living standards depends on many factors, including economic and social inequality and, no less importantly, on what the government does with the public revenue that is generated by economic growth. 

Some statistics about China and India, drawn mainly from the World Bank and the United Nations, are relevant here. Life expectancy at birth in China is 73.5 years; in India it is 64.4 years. The infant mortality rate is 50 per thousand in India, compared with just 17 in China; the mortality rate for children under 5 is 65 per thousand for Indians and 19 for the Chinese; and the maternal mortality rate is 230 per 100,000 live births in India and 38 in China. The mean years of schooling in India were estimated to be 4.4 years, compared with 7.5 years in China. China’s adult literacy rate is 94 percent, compared with India’s 74 percent according to the preliminary tables of the 2011 census. 

As a result of India’s effort to improve the schooling of girls, its literacy rate for women between the ages of 15 and 24 has clearly risen; but that rate is still not much above 80 percent, whereas in China it is 99 percent. One of the serious failures of India is that a very substantial proportion of Indian children are, to varying degrees, undernourished (depending on the criteria used, the proportion can come close to half of all children), compared with a very small proportion in China. Only 66 percent of Indian children are immunized with triple vaccine (diphtheria/pertussis/tetanus), as opposed to 97 percent in China. Comparing India with China according to such standards can be more useful for policy discussions in India than confining the comparison to GNP growth rates only. Those who are fearful that India’s growth performance would suffer if it paid more attention to “social objectives” such as education and health care should seriously consider that notwithstanding these “social” activities and achievements, China’s rate of GNP growth is still clearly higher than India’s.

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by Amartya Sen