Odds Are Against India Ever Becoming a High Income Developed Country
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- Опубликовано: 8 окт 2024
- "The odds are against India becoming a high income developed country - there's no guarantee": World Bank Chief Economist, Indermit Gill, to Karan Thapar for The Wire.
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The Chief Economist of the World Bank, who is also the author of the middle income trap concept, has said: “The odds are against India becoming a high income developed country - there’s no guarantee”. Indermit Gill says the majority of middle income countries remain middle income countries. In India’s case, he believes it will easily progress from its present per capita income of $2,500 to levels of $8,000-$10,000 but then it could get stuck. Up till now no country of India’s size or demography has progressed from middle income status to high income developed country status.
In a comprehensive and detailed interview to Karan Thapar for The Wire, Dr. Gill, who is also the World Bank’s Senior Vice President for Development Economics, said if India gets stuck in a middle income trap it would be “pretty good” for some 400 million people i.e. the rich and the middle and upper middle classes but, he added, “it won’t be good at all” for the remaining 1 billion Indians.
In the interview, Dr. Gill identified three critical steps that need to be taken if India is to avoid the danger of getting stuck in a middle income trap. Briefly, these are, first, greater economic freedom, second, a far greater effort to ensure equal opportunity for all people of all faiths and both sexes and, third, massive investment in education.
This is a very detailed and closely-argued interview. No one in the world understands the middle income trap and its dangers better than Dr. Gill. He also has excellent knowledge and understanding of the Indian economy. He has, after all, been educated in India and is an Indian citizen. Therefore, if you want to understand both the middle income trap concept and the danger that India could get stuck within it I suggest you see this interview. I don’t want to take the risk of précising or paraphrasing what he said in case I misrepresent his views or convey the wrong impression through an attempt to be brief.
One of the important things Dr. Gill says is that countries in the middle income threshold need to learn from developed countries how to use the investment they have most effectively. In other words, as he puts it, don’t seek to reinvent the wheel, emulate and then adapt what the developed world has done. The Latin American countries, now caught in the middle income trap, attempted to re-invent the wheel behind economic barriers they erected and failed. This raises significant questions about the relevance of atmanirbhar. Dr. Gill discusses this. You will see it in the interview. Is it a mistaken policy for India? Or is the way it’s been emphasized wrong? Please see the interview to find out.
Another point Dr. Gill makes is that it could take India 75 years to reach just one quarter of the United States per capita income. At the moment India’s per capita income is $2,500. The US per capita income is $81,600. One quarter is $20,400. In other words, it will take India 75 years to increase its income from $2,500 to $20,400.
But even when that happens, will India have reached high income levels? At the moment, the threshold for high income countries is $13,000. But where will that threshold be 75 years from now? That’s the key question. Again, this is discussed in the interview.
I will stop here. However, to help you I will give you the list of main questions put to Dr. Gill. They weren’t necessarily asked in this order. Here they are:
1) I want to focus this interview on the concept of a middle income trap and the possibility that India could get caught in it. First, as the person who devised this concept, can you start by defining what is the middle income trap?
2) Is it true that the majority of middle income countries get caught in the middle income trap and it’s only a minority that progress to become high income developed countries? This majority I’m told includes countries like Egypt, Brazil and Turkey.
3) What is it about the economy of countries that get caught in the middle income trap that leads to this happening? In other words, what’s the difference between countries that get caught in the trap and those that progress to become high income developed countries?
4) Now three countries that have progressed through middle income to become developed countries are South Korea, Taiwan and, most people would agree, China. What are the qualities or characteristics that explain their success?
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Hindutva doesn't have the ideological framework to keep the country together.... forget about becoming a developed country....the struggle in coming years for India will be to stay a one union
Hindutva...made us the richest civilization for thousands of years..duh!
India was the richest civilization for thousands of years...won'tbe too difficult ...to get to high income developed country in a few decades..case closed
Hindutva ideology will pull back the progress
100% true.
Harsh but true
If the BJP continues in power in the Union government.We won't even become a Middle income economy.
I will be happy if we will remain a medieval country by the end of Modi's rule.....
@@mangalapalliv you're are absolutely wrong.When the leaders of nationalist movement particularly the Indian National congress conferred it's citizens universal adult suffrage irrespective of race, religion,ethnicity, language,rich or poor in the first general elections itself we made the transition from a medieval society to a modern democracy.Even the so-called developed countries like the United Kingdom gave voting rights for women only in the early 1920's.
BJP in power and we almost tripled per capita income..in 10 years...duh!
Yeah sure let’s choose RaGa and his khata khat policies that will turn us into a Zimbabwean
As long as criminal and thugs are in politics and bureaucracy and people don't elect good people in politics, India will remain poor.
Only dynasts are unhappy.
@@Dadasahab1234, every small business person is unhappy with terrible infrastructure and high taxes. Sanghis like you will support ruling party at the expense of the nation.
@@jacobcheriyanReal andhbhakt s think so.😮
@@jacobcheriyan which small businessman? What is their output & Export ? Importers & traders r not considered too much valuable for nation.
@@surojeetchatterji9966 , do you know how many SMEs closed down because of demonitisation? You will know only about corporates.
We need educated youngsters in politics ,not goons & bluff masters ,uneducated fraudsters in the center till then we will remain at the bottom
First 50 years wasted. Narsimha Rao opened economy. Thus India is lagging behind several developing countries.
@@Dadasahab1234 : Yippeee I spotted a bhakt... blaming it on the past......
educated PM...took us to fragile five economies in 2013...lol
To be a high income developed country you have to get at least 8-10 things right starting with democracy, capitalism, women empowerment, rule of law, expeditious justice delivery system, high level of adherence to human rights, less dogma and religious intolerance, high literacy rate, world class educational institutions, substantial entrepreneurial ability and thriving MSME segment. India has some of these requirement but not all and what's more important is that it is lacking substantially in many.
Supporting small businesses and highly promoting and investment in research and development manufacturing and exporting fully finish branded goods and tech products promoting equal and fair opportunity in business and market competition and not doing favoritism and crony capitalism
@@archanadhanekar5680 That will happen if we have world class educational institutions like Harvard and Stanford. Most of the R&D is done by Universities although they are funded by big businesses.
@@vs9324 True but we also promote small businesses too and economic freedom
Very well said.
Those metrics suggest that the USA should be in the middle income trap. If India gets to a middle income per capita, we should be happy. It will raise 600-700 million out of poverty, which is an excellent thing. The high income/ per capita consume more than they need causing untold problems for the rest of the world.
Much needed interview thankyou The wire, Karan Thapar
kya fayda hua?
I have been hearing for the last 45 years, that education for all is very important. But none of the fellows have done nothing.
Let me start. "None of the fellows have done nothing" is double negative. Incorrect. "Have done nothing" is the correct way to say that.
NEP 1986, SSA, RTE, NEP 2020, PM SHRI, PM POSHAN, APAAR, ECCE are some milestones
Our Demographic dividend is not available for centuries. When unemployment is so high, what demographic dividend are we going to derive?
It doesn't need an expert to confirm that given our current realities, we are not going to become a developed economy
with equitable distribution of wealth in the near future 😂
Exactly
Maybe in next 50 years.
India was the richest civilization for thousands of years...won'tbe too difficult ...to get to high income developed country in a few decades..case closed
@@stallionspirit1576 that was because we were the most populous country. our per capita income has never been very high in recorded history.
Fostering communal tension and disharmony in the name of religious extremism is more important for the fascist Hindutva government of BJPee than developing the economy and eradicating the poverty of the masses.
Islamists broke India into two in 1947. They are on their agenda. Look at voting trend. In Kashmir valley BJP got less than 2 % votes while, communal and fascist got 98 % votes.
@@Dadasahab1234 they did it back then but today the fascist Hindutva communal party of BJPee is dividing and polarising the country in the name of religious extremism and their brand of toxic politics. Isn’t that how they managed to cling to power by playing the religion and pseudo-nationalism card - albeit with a reduced and unstable majority?
@@suryaprakash72771 they r doing it in Iran & kashmir. It's not over yet.
@@surojeetchatterji9966 that’s just sanghi propaganda without facts and merit
High income country discussion is a joke, go visit UP and Bihar and see how many people are jobless and near poverty line even though they come from middle class family.
The problem is with this electoral system where the politicians feel fear only a few months before the election but the citizens feel fear for the next 5 years after the election🙄
Not surprising that there is an inverse correlation between population growth and relative wealth of the individual. Population control and increasing empowerement of the individual's rights is the recipe for a prosperous nation.
Irrelevant topic of debate for today's India. What should be debated if India will remain as a one union in coming years.
This data will put things in perspective.
Average monthly earning in India (2022):
Self-employed: Rs 11,973
Regular salaried: Rs 19,010
Casual: Rs 8,267
Distribution of employment in India (2022):
Self-employed: 55.8%
Regular salaried: 21.5%
Casual: 22.7%
Source: ILO
Equal opportunity, education and innovation can only take us to higher income group. There has be peace and no political turmoils .
Till one accepts the reality, no change is possible
Per capita income here in india? Corruption... Nepotism... Government slow down, transmission losses r too high
per capita income increased 2.5x times.. in 10years..duh!
Good afternoon sir. To raise the per capita it is obviously true to learn from other countries, the elements of raising per capia like economic freedom, equal opportunities to all section of people and investment on education . It is analyzed very deeply by Dr Gill how to raise in terms of per capita level . This topic in your channel is really enjoyable and educative one for all of us. Machinery of government, educated youths and all section of businessman comes under this ideology if we want to make the dream into reality. May Almighty lead our nation into prosperity.
Why do we want India to become a High income economy? 1.4 Billion people live here; that's like 20% of world's population. The focus should be to lift as many people as possible out of poverty by making them self sufficient in terms of economy and not to become a completely export driven country...
Just a common sense question, is it possible for the majority of the world population to reach High Income levels? (India represents one fifth of humanity). In order to reach High Income levels, you have to consume a lot of raw materials and energy. The point is: is there enough raw materials and energy for so many of the world population to reach those levels? The economists think only of growth but then the impact on the life and survival of humanity is never considered. Rather we should aim at an egalitarian way of life.
It's said Common Sense is the Rarest Sense ..
wont be too difficult..as we were the richest civilization for 1000s of years...will do it again
India needs to improve on many many fronts - poverty, malnutrition, health, education , employment, jobs, research, infrastructure, environment, women empowerment, and many more. To top it all.governance has to be more than excellent to make up for previous lethargy snd losses. People also have to be enthusiastic, at least for the sake of their children.
We should walk the talk in all economic policies
जय-जय सविंधान जय-जय भारत जय-जय कांग्रेस
India has a youthfull population ,but it wont be that way for ever ,if we cant get increase our pre income capita before our demographic shifts to being aging population we are internally screwed
Which we intuitively already know
Reforms needed to be high income India.
1) Decriminalization, communal free and caste free politics at local and national level. Public funding of elections.
2) Judicial and Police Reforms
3) Punish corrupt quickly and reduce corruption.
4) Reduce bureaucracy administrative reforms and minimal regulations.
5) 15 years quality school education to all.
7) World class universities (In top 50) in engineering, science and medicine.
8) Science, research and innovation
9) Infrastructure at City and National level. Good and more planned houses, planned roads, electricity, sewage, internet, planned cities. Like Western countries
10) Availability of cheap credit and investment both public and private.
11) Meritocracy
12) Enhanced Press freedom and personal liberty
13) Food production and self reliance
14) Energy production and self reliance
15) Land reforms and cheap land availablity
16) Labour reforms and labour availability.
Very insightful
High cost of borrowing is cause of Industrial sickness.
About 10% Indians .. who had generational advantage... businesses.... large land holdings and quality educational opportunities ... upper castes... are presently in middle income zone .There are never equal opportunities to other 90% Indians
Agriculture and democracy will ensure we remain an undeveloped country for ever
What a beautiful exploration office the future economics? Will the right people listen? Thanks.
What is the status of india in the hunger index ?
Informative discussion but how about purchasing power parity , this seems to compare absolute dollar terms
The per capita debts of devloped countries pls?
The two wheeler industry which is the largest in the world adopted the solution which Dr Gill prescribes
The secret is to have a mixed global community in India and offer citizenship to the the cream of the world. Singapore, Malaysia are a case study in Asia which I dia can emulate.
Please send this video to our ex CEA - K V Subrahmanyam
0:02 People find out ways to improve themselves in India despite facing impediments from Babus, Police, Banks etc. So many of them have successfully sought study/jobs abroad despite adversity. People like me forming 0.1% of the Wealth Pyramid have learnt the tricks of the trade. We had 0 savings 30 yrs back. Our Children were not really in rat race in India during their Engg. studies because they just wanted a first class with good English. They had done their hobbies with International certifications to boost their CVs. They prepared well for GRE and got Good US Universities MS and a good job. Can other families can't do this? Yes but Parents are not well informed. Hope Indians learn to take advantage of opportunities by themselves. Think as if you are a German or Japanese after WW2. You will prosper for sure. FYI my monthly expenses are 16 -17 k pm. I don't own car and live in self owned zero debt apt. 1000 sqft. In the suburbs.
Independent institutions like the judiciary and law agencies are the most important for progress.
You did not interrupt here. Mile you did with Prof Marandi. Shame on you.
All talk in US dollar. Dollar parity may not be okay. Purchase parity will be fine. So, 15000 dollars may be equal to 80000 dollars per year. But inequalities remain a great worry
Good Interview- little high level and theoretical
Just a question. Did anyone think otherwise ? You needed an EXPERT to tell you that india will never become an overall wrll developed atio ? Ever !!
🍲food, scarcity in india 🇮🇳is v. V. High. I think more than 50%= of our population don't get 2400 calories a day?? I see 👀a, lot of stunted ( poor people)growth all the country ....
LEARN FROM OTHERS
JAI JAWAN
JAI KISAN
IMPROVE EDUCATION
IMPROVE WOMEN SAFEETY
DO NOT GO BACK MEDIVEL TIME
Indian policy makers are so slothful and poor risk takers , due to which we will be stuck not in the mid level, but at low income levels. Our transport policy is a top class elucidation of how employment to the poor is denied by the meaningless policies , by denying introduction of three wheelers for long periods of time , though population is growing fast and private ownership of vehicles are growing equally fast . In many cities 20000 licenses for autos were released after decades and the courts granted stay even on this . Even FSSAI does not permit the poor to start food outlets easily thereby reducing employment even further. The series of laws implemented since 2009 till 2024 are chocking the employment cycle even further .
Are we discussing about India in the next Century?
This is very good journalism but I feel India won't become high income country.😅❤🔥
some people also felt...we wont be in the top 10 economy..lol
you expect something from people who would vote for caste/free alcohol/ free food/ 100 Rs. during elections? No right ? Then stop day dreaming because these type of people are in majority in india
People who support 2% Nehruvian socialist economy all their life now have the audacity to talk about higher income😂
The only thing i can take home is india is not to become high income country anytime soon so move out make money and return and try to resettle here.
Very disappointing. India’s economics freedom is less, false. Second suggestion for fiscal conservatism goes against his third suggestion to increase investment in education. Where does the money going to come? Govt borrowing reducing private borrowing is an outdated and wrong understanding of financial system.
Why talk of high income when India is still very far from achieving middle income status
The equality of opportunity isconflated with equality of outcome. There is a political equality hubris which is mixed up with liberalism in economy.
EEO legislation in US is called out & 100% white men in 1960s as professionals to 50% today is cited as success.
The 50% is due to women participation ... & that has had its own trade off with demographic collapse. Another factor is huge educated, qualified immigration which cuts the " white" part. It is such selective data pick ups that are dangerous.
No such examples ofcourse from China, Korea, Japan. & contrast that to rise in women participation in IT in India. But cant happen in more unskilled talent markets. Anyway, is B'desh better off with women in textiles vis-a-vis millions of unemployed men ?
Finally, am happy with this focus by Karan on how to get to 15k usd per capita. It will be good to recognize Modi's call for Viksit Bharat as an aspirational call instead of knocking it down.
& somewhere the role of slavery to generate surplus, WW2 mobilization to get out of 30s depression & export of defence equipment shld be highlighted in the case of US.
The analytical study and conclusion is not for a lay man,ask steps to take by an educated person upto next 10 years
Outsource the government and see India bloom
isnt becoming 3rd largest economy by 2028...blooming?..lol
True education need to be improve
Thapar always tried to be negative but thanks to Gill he shows him the reality, India's economic performance,Investment,business index,startup ecosystem everything is so good that he have to praised Centre govt..👍👍
even China has not become a high income developed country.
Very true Sir/Ma'am, But the gap in the current standing of China as of 2023-24 is huge, current GNI of China is approx 13,000 USD, and that of India is appx 2200 USD, Let take a scenario of China stops growth today at this point it stays same, and India grows at a constant 6%, so taking the rule of doubles it will take us 12 years to reach the double of our GNI today i.e. to reach 4400 USD by that it will take us 30.7 years to reach 13,000 USD which is China's current GNI. So if China stops growing we will match them in 30.7 years..
What is Karan's fancy / obsession with USA level of incomes ?
Thapar want Gill to criticize Modi but alas modi is well praised by Economist Gill😊
41:24 the moment the guest started praising the Modi govt and said negatively about the UPA immediately Karan cuts him because he has a negative agenda.
41:35 Karan now accuses Modi of gaming the system. What a meltdown.
42:33 again the guest praises Modi govt and Karan's face has to be seen.
What are we discussing only
India is an emerging economy right now - pehle middle income to ho jayein, where China is right now - high income ki to baat bhi karna bemani hai
India was the richest civilization for thousands of years...won'tbe too difficult ...to get to high income developed country in a few decades..case closed
Poor ( in india) people r too much in number. Exraordinaly big number. Difficult t tackle?
lifted 250million+ ..out of multidimensional poverty..in only 10years...
Bhakt V.S. super bhakt. 😢
Worst interview, Karan had to drag him out to make a clear point every time. Boring and lethargic story teller.
Sirs, arithmetically it is very easy to see the difficulty of middle income trap.
$1500- &150=$1350
$15000-$1500=$13500
Thus to avoid middle income trap an economy has to perform 10
times better than lower to upper lower per capita income.
They know all this but they are here to set an agenda .
wont be too difficult..as we were the richest civilization for 1000s of years
Amazing Karan keeps questioning if India will ever be High income or middle income country, when its not even low income counry. 😅
India is a low middle income country and it's getting worst
@@archanadhanekar5680 Stats are hard to come by, reliable stats are almost non existent, how can anyone know for sure. rBI data is horrendous. Last three years, less than 30% of accounts are seeing any activity, others negligible or dormant.
800 millions now rely on government for food support. Where is the low income?
If you remove Adani, Ambani and 100 billionaires networth then per capita income willbe around ₹9000 pm. That is Sub Saharan.
@@k2712m who stopped others to export petroleum products like Ambani ?
@@k2712m there is an opportunity for economic opportunity and wealth creation through distribution. The EV sector is being deliberately stymied and throttled by a few car makers and oil companies. There will be wider income distribution in the many innovations in the ev sector. Too bad, nation will need to wait for 5 more years for the floodgates to open.
India is 5 th biggest economy in the world, will soon become third. Bhakts do not want so.😢
If Dr. Gill can live on even twice the World Bank poverty level income ($2.15PPP) for one year, I will give him ten crore rupees. The World Bank poverty level income keeps an illusion that prevents the right economic policies. The World Bank, which includes Dr. Gill, is dangerous to the economic health of India. Mr. Thapar once gushed to congratulate Montek Ahluwalia for lifting crores out of poverty based on this phony standard.
Torah torah torah...
Poor Karan cannot listen, he must interrupt.
India took 50 years to go from USD 300/year to 1500/year (1960 to 2010) - courtesy Congress. Pappu will repeat the performance by resuming the journey with a caste census. India - BEWARE OF PAPPU
The fastest way for India to reduce the per capita income gap between US and India is for the world to de-dollarize and reduce dependence on US dollar. Part of the reason US has high per capita income is that they just have to print the dollar which the world laps up. Million dollar question : What will replace the dollar? Well, if i knew the answer to that I would be a Nobel winning economist.
@@vs9324 CCP wumao Dalal detected, opinion rejected. India will take decision based on trade imbalance of India with which country. For India dollar is trade surplus & Yuan is trade deficit countries.
Sir,
First we are comparing with dollars which is not correct paper money doesn't have any intrinsic value, if we our people to be progressive we should have Gold and Silver coins as our way of transaction.
gold and silver is not wealth, energy and access to the progression of industrial revolutions(information and infrastructure) that's what generates wealth waves
Outfhur oii ashkbmiyt so mayhj 😂😂😂😂😂😅😅😅 feriiii
people in US don't think they are high income. Also Latin Americans are small population countries with amazing resources. Why don't the economists start with this altogether and highlight the challenges that India has. Instead disingenuously karan is always trying to fault Modi and the idiots in the comments have fun abusing the hindus calling them sanghis etc.