As we are nearing the close of 2022, India’s economic parameters have been making headlines.

On September 2, 2022, India was declared the fifth largest growing economy surpassing the UK, according to the IMF. It is expected to assume third place by 2030.

But when seen alongside some recently released social and human development indices, this growth performance loses some of its sheen.

Even if we look at its economic performance, India’s comparison with the UK is misplaced. India has overtaken the UK in terms of nominal GDP — $3.5 trillion as against $3.2 trillion. But India’s per capita income is $2,500 against the $47,000 in the case of the UK, as per IMF 2022 reports.

In the Global Hunger Index, India is ranked below Sri Lanka, Nepal, Bangladesh, and Pakistan. It stands at 107th position out of 121 countries with a score of 29.1, which is a matter of ‘serious’ concern, according to the GHI’s categorisation. It is possible to argue that the methodology of these studies is flawed, or biased. But some other prominent indices too paint an unflattering picture, which reinforces the notion that India’s growth is riddled with contradictions. India has slipped from 131st to 132nd position in the Human Development Index released on September 8.

Unequal India

India is also among the world’s most unequal countries, according to the World Inequality Report 2022. It says that the top 10 per cent, and top 1 per cent own 57 per cent and 22 per cent of the total national income, respectively. The bottom 50 per cent has a share of 13 per cent. Predictably, the Centre has criticised its methodology.

According to the UNDP’s Multidimensional Poverty Index 2022, released on Monday, 415 million exited poverty between 2005-06 and 2019-21; yet, the largest number of poor in the world, 228.9 million, were in India in 2020. And, the UNDP report is a pre-Covid estimate. According to NITI Aayog’s own MPI, India’s poverty headcount ratio stands at 25 per cent, with the rural headcount at 32.75 per cent and the urban headcount at 8.81 per cent.

While the unemployment data may be a subject of debate, the fact remains that proxy indicators such as private final consumption expenditure point to demand depression, and therefore of incomes and wages. Female labour force participation rate at below 20 per cent is abysmal.

Also the external account looks fragile. Imports have been outpacing exports, a trend that is likely to worsen due to a downturn in the world economy. This could bring down the rupee in the absence of robust capital flows — further widening the trade gap.

It does not help that petroleum products, which account for a fifth of the import bill, are turning expensive by the day. Not surprisingly, retail inflation is up to 7.4 per cent in September.

So is India’s growth sustainable; and is it ethically and socially sound? Is it a growth story for the top few? An economic model of the opulent, and for the opulent is not a happy augury for a democracy.

The writer teaches economics at Dr Bhim Rao Ambedkar College, University of Delhi