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Contradicting the dominant view on high GDP growth in the recent past, top economist Prof Kaushik Basu has said that India’s economic growth has been a “mixed bag” during 2020-22 – it grew by a mere 3%. Speaking at the Eighth Pravin Visaria Memorial Public Lecture, organised by the Gujarat Institute of Development Research in Ahmedabad, Prof Basu, citing World Bank calculations, said, when it is stated that the Indian economy grew by 8.7% in 2021 (or 7.5% in 2022), it is forgotten that the calculaltion is based on the GDP growth of 2020, which was (minus) – 6.6%.
Currently Carl Marks Professor of International Studies, Ithaca, New York, and former chief economist, World Bank (2012-16) and chief economic adviser, Government of India (2009-12), Prof Basu’s visual presentation of the economic growth of selected countries showed that India’s growth rate in 2020-22, the Covid period, 3%, may have been better than the world average (1.7%) and emerging markets and developing economies (27%). However, it is lower than Bangladesh (5.6%), China (4.8%), Egypt (4.3%) and Vietman (3.8%).
Speaking on “Changing Nature of the Global Economy and Labour Markets: What May the Future Hold”, Prof Basu warned against the “risks” of hyper-nationalism to the Indian economy, pointing out, today, when globalisation is becoming a reality, thanks to the digital revolution, any de-globalisation move by whipping up nationalistic sentiments would prove to be counterproductive to the economy. “We have the experience of Argentina, where hypernationalism led to collapse of the economy”, he asserted.
Giving yet another example, he said, McCarthyism in the US in early 1950s, when hypernationalism was whipped up to target anyone who differed with American policies, dubbing them all as Communists, proved to be counterproductive. People got restless before it was too late. They realised it within three years, and voted it out, and the McCarthy period ended, lest the US economy would have suffered in a big way, he added.
Pointing out that the future of world economic growth, especially after the digital revolution, which has taken firmer roots during the Covid period, heavily depends on how two soft sectors develop – health and education – Prof Basu said, already this is becoming a reality for countries like South Korea and Japan, which have lately registered largest number of patents compared to other countries. “Teachers’ salary in South Korea is one of the highest in the world”, he stated.
Coming to the US economy, Prof Basu said, it is holding high not because of the hardware – cars, real estate, machines – but because it has proved to a very strong soft power, especially in the education sector, adding, India’s future growth rate would, too, depend on how these two sectors develop and perform. India has had the precedent of strong international presence in higher learning in the past, which needs to be revived, he suggested.
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