From 1947 to 2021
We know its a day late. But happy Independence day nonetheless.
Yesterday we posted a few colourful charts on social media outlining the progress we've made as a nation these past few decades. And while a lot of people liked the idea, there were many others who were hoping we'd offer some extra context alongside these infographics.
So in today's Finshots we will do just that.
The Story
1) Where food is hard to come by
On November 26, 1947, R.K. Shanmukham Chetty, the then finance minister, rose to present the first budget of a free and independent India. And while it was a momentous occasion in many ways, it was also a sober reminder of the depredations the colonial enterprise had imposed on the country. Take for instance this excerpt from his budget speech outlining the acute food crisis plaguing India.
“The food position has continued to cause grave anxiety both to the Provincial Governments and the Central Government… The results of the “Grow More Food Campaign” have been on the whole disappointing. During the three years 1944- 45, 1945–46 and 1946–47 we had to import from abroad 43.80 lakhs of tons of foodgrains at a cost of over 127 crores of rupees. During the current year from April to September we have already imported 10.62 lakhs of tons of foodgrains at a cost of over 42 crores of rupees. Apart from its being a constant source of anxiety, the reliance on the import of foodgrains from abroad of such magnitude imposes a heavy strain on the finances of the Government. In recent years our exchange difficulty is almost entirely due to the import of foodgrains on such a large scale. The meagre exchange resources available to us are consumed by the purchase of foodstuffs abroad with the result that we have to impose the most stringent restrictions on the import of many other essential articles. The various steps necessary for making the country selfsufficient in foodgrains must now claim the highest priority.”
It took us another few decades to be self-sufficient. But since the 1990s, India has had enough food to feed its entire population. In fact, today we are the world’s largest producer of milk, pulses and millets, and the second-largest producer of rice, wheat, sugarcane, groundnuts, vegetables, fruit, and cotton.
Unfortunately, that doesn’t mean we are out of the woods yet. We still do not yet have food security in this country, which according to the Food and Agriculture Organization is achieved ‘when all people, at all times, have physical, social, and economic access to sufficient, safe, and nutritious food that meets their dietary needs and food preferences for an active and healthy life.’
There’s also the fact that most government policies focus on calorie intake when malnutrition — caused by a lack of dietary diversity is the main problem. In a country where it’s completely normal for poor laborers to survive on a diet of salt and rice, we have to make sure that their dietary needs are met fully. So clearly, there’s still a lot of work that needs to be done.
2) Agriculture is no longer the top dog
The big takeaway here is the obvious decline in agriculture's contribution to the GDP.
But this isn’t a function of agriculture alone. Sure, growth in the agriculture sector has been declining for a while now. But the other sectors are eating into its share. For instance, the services sector now dominates the ranks and this has been the case for some time now. And while that is not a concern in itself, there is a tiny issue here. Agriculture is still the primary source of livelihood for about 58% of India’s population. So even though, we’ve seen exponential growth in the past few decades, the distribution of proceeds has probably been unequal because of this lopsided equation i.e. We have most of our growth coming in from the services industry, and yet we only have a tiny fraction of the population employed in these sectors. So if this equation persists, then we will see inequality seep further into India’s growth narrative.
3) India's Export story
If you pay close attention to the next chart, you’ll see once again that the export mix looks nothing like it did back in 1947. While once we shipped jute, cotton, and tea, today we are exporting refined petroleum, jewellery, and cars. It’s a far cry from the India of 1947 and there’s a story here that needs telling. In pre-colonial India, the British carefully designed policies to fully own the country’s foreign trade. For instance, it’s not like Indian exporters were coming together and betting big on the jute industry. Instead, it was a well-known fact that the empire had its needs and India had to meet those needs. Export controls were implemented and half of our trade was authorized to Britain alone. We shipped them raw materials and they shipped back finished goods. In some cases, they even re-exported these products at a premium. And when we boasted a surplus i.e. when our export figures blew past the imports, the extra income was diverted set up colonial offices in India, and aid Britain’s war efforts elsewhere.
Bottom line — The export mix tells a story of a time when we were fully governed by the British to support the empire’s needs.
4) The Connectivity Problem
People don’t think a lot about roads. But roads are the lifeblood of this country. Close to 80% of the passenger traffic move on roads and it aids the country’s development in many ways.
Now the graph might tell you that India’s roadways increased 16 fold in over 7 decades. But progress was slow for a long long time. Take for instance the case of national highways. National highways may make up only a fraction of the total road network in India, but they carry a bulk of the country’s traffic and their growth was in no way spectacular. In 1947, India’s national highway network was just around 23,000 km. By the late 1990s, it was still languishing at 34,000 km. As a PwC report notes — “It was in the late 1990s that the government realised the importance of improving the road network in India. The network of national highways has increased considerably over the last 15 years. In 1997, national highways had a total length of 34,298 km which shot up to around 70,000 km recorded presently.”
But that report was from 2012. In 2021, India’s national highway network stands at about 1,51,000 km. So we covered a lot of ground in the past 20 odd years. And while you could argue that this is attributable to the government's focus on road transport these past few years, you could also make the case that this was imperative considering the progress we were making on the economic front post liberalization.
So really, the question is this — Did the roads trigger the economic progress or did the economic progress spur the creation of new roadways?
You tell us.
Until then...
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