TCS Daily

'A Tryst With Destiny'

By Bibek Debroy - August 29, 2003 12:00 AM

Let's begin at the beginning and that, for me, lies in a quote. "Long years ago, we made a tryst with destiny, and now the time comes when we shall redeem our pledge, not wholly or in full measure, but very substantially. At the stroke of the midnight hour, when the world sleeps, India will awake to life and freedom."

As many Indians know, this is a quote from the speech delivered by Prime Minister Nehru at midnight, August 15, 1947, marking India's independence from British rule. I wasn't born in 1947 and, in fact, have absolutely no idea of what it felt like to be born in a country that wasn't independent. I have no direct means of knowing or feeling what economic conditions in India were like then. But there are people alive who listened to that speech at the stroke of midnight on the 14th/15th of August. They must have felt inspired. They must have dreamt a dream that would finally become successful: independent India would occupy her rightful place under the sun.

More than a half-century has passed since that speech. We have not only celebrated more than 50 years of independence, we have also celebrated more than 50 years of our Constitution, a Constitution that entered into force in 1950. We often forget the Preamble to that Constitution. Here is what it says: "We the people of India... do hereby adopt, enact and give to ourselves this Constitution." Notice that as Indian citizens we gave ourselves this Constitution. No one else gave it to us.

According to the Constitution, there are three main organs of government -- the legislative, the executive and the judiciary -- and they determine and influence our lives. However, the Indian economy has not been created to serve these three parts of government. The Indian economy is meant to serve the interests and well being of India's citizens. That's the reason we gave ourselves our Constitution, with the three organs of the state meant to be instruments, not ends in themselves.

The decade of the 1990s coincided with the onset of reforms in India; however, after 55 years of independence, what is the state of the Indian economy? What is the state of India's citizens? Every year since 1990, UNDP has issued the Human Development Report (HDR). The last HDR is for the year 2003. Since there is always a time lag in collecting or processing data, the data used in the HDR for 2003 are usually for 2001.

India is invariably described as a poor country. Different variables can be used for the judgment -- a standard variable used is per capita national income or per capita income, which gives an average idea of how rich or poor the citizens of a particular country are. The U.S. dollar is the common denominator by which per capita incomes of different countries are expressed, and Indian per capita income in rupees is converted into dollars using the exchange rate. One of the things the World Bank does is to generate per capita incomes of different countries of the world, expressed in U.S. dollars through World Development Indicators. There is also a slimmer volume known as the World Bank Atlas. This method of using official exchange rates to convert per capita income in rupees into per capita income in U.S. dollars is therefore known as the Atlas method. When UNDP gives India's per capita income, it doesn't generate these figures itself, it uses data from the World Bank.

Let's return to the HDR for 2002, because HDR for 2003 doesn't have this particular figure. What was India's per capita income in 1999? 450 U.S. dollars. Today, in 2003, it has passed 500 U.S. dollars. Is 450 dollars high or low when considered across such a vast country? That's difficult to answer, because many things in life are relative. In 1999, the World Bank worked out per capita incomes for 206 countries in the world. Data are sometimes not available for some countries. In this ranking of 206 countries, India's rank was 162nd, judged by per capita income. Rank number 161 was occupied by Haiti and Haiti's per capita income was 10 dollars more than ours. Rank number 163 was occupied by Nicaragua and Nicaragua's per capita income was 20 dollars less than ours.

Is this the kind of tryst with destiny we want? Wedged between Haiti and Nicaragua?

Bibek Debroy is Director of the Rajiv Gandhi Institute for Contemporary Studies in New Delhi, and an advisor to the Liberty Institute in New Delhi. He will be writing a regular economics column for TCS.


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