India 2050 - What we need to do?
Relooking at India's GDP Distribution from 2004 onwards
March 18, 2023, India.
I wrote an article on Jan 21st, 2005, about India's Goals for 2020. The key points in that article were about the GDP (Gross Domestic Product) and Labor distribution across the sectors (Agriculture, Industry, and Services).
In 2004 (India's) GDP, Labour distribution for Agriculture was around 60% (282 Million / 28.2 Cr people), and in the last 20 years, we were able to reduce that to only 42%, approximately 213 Million (21.3 Cr) People. At the same time, China decreased that from 50% (389 Million in 2004) to 27% (219 Million people in 2021).
Another surprising factor is even though we overtook the Chinese in terms of population, the Govt stats show that our workforce is only 507 million (50.7 Cr) people, while the expected workforce is around 800 million (80 Cr) people.
Our workforce is expected to be around 800-900 million in the next 5-10 years. The worrying question is what will be the distribution of the labor force in 2030 (assuming 800 million people) and what percentage of that workforce will be in Agriculture. 40% of 800 Million will be around 320 Million, or 35% labor force (Agriculture) will be approximately 280 Million people. The Entire US population is approximately 340 Million.
Now let us look at the table to compare India and China's progress in the last 20 years. The focus is on the GDP distribution to the economy and labor distribution in each sector (Agriculture, Industry & Services).
213 Million (21.3 Cr) people in the Agriculture sector. Now Let us understand the problem.
The above chart shows our progress from 2004 to 2023, almost two decades, and we reduced our Labor force in Agriculture from 60% to 42%. Still, That's quite a large population in the workforce. 42% of 507 Million is 213 million workers. Please listen to the India Today Conclave 2023 discussion on 4D Democracy, Demography, Digitisation & De-Globalization, by Amitabh Kant (X-CEO Niti Aayog) and Palanivel Thiagarajan (FM, Tamil Nadu). In the blog I wrote in 2005, I mentioned the importance of moving the Agriculture Labor (majority) force into Industry and Services. Finally, after two decades, Amitabh Kant (former CEO of Niti Aayog and India's G20 Sherpa in 2023) echoed the same sentiment, and that's a good sign.
You cant grow 9% / year with 42% of the workforce depending on Agriculture. You need to move the population from Agriculture to Industry. Education / Health is a state subject and every state has to deliver much like what the Southern States did.
Amitabh Kant, India’s G20 Sherpa, x-CEO of Niti Aayog, 2023
Niti Aayog - State of States 2021
Niti - National Institution for Transforming India replaced the 5 year planning commission.
Kerala ranked #1, while Himachal Pradesh and Tamil Nadu ranked #2. These states (especially Kerala & Tamil Nadu) emphasize Pro-People Economic Model, also known as Kerala Development Model or Dravida Development Model. Check out the Sustainable Development Goals - SDG2 (Zero Hunger), SDG4 (Education), and SDG9 (Industry, Innovation & Infrastructure). We will see why these SDGs are essential when you want to move the Labor Force from Agriculture to Industry.
#1. Kerala - 2021
#2. Tamil Nadu - 2021
#13. Uttar Pradesh - 2021
#16. Bihar- 2021
India's GDP Distribution 2004, 2012 2021
Niti Aayog - MultiDimensional Poverty Index - 2021
% of Population deprived of Schooling (6 Years)
A household is deprived if not even one family member aged 10 years or older has completed six years of schooling.
Among the large states
- Bihar (Population 2021 - 126.7 Million / 12.67 Cr)
- Uttar Pradesh (2021 - 234.7 Million / 23.4 Cr)
- Madhya Pradesh (2021 - 85.3 Million / 8.53 Cr)
- Jharkhand (2021 - 39.4 Million / 3.94 Cr)
need to put more emphasis on Education and focus on spending more on Education than other activities.
Compare this to Kerala (Population 2021 - 34.84 Million or 3.48 Cr), only 1.7% is deprived of schooling.
- Bihar (26.7%) = 33.82 Million or 3.38 Cr
- Jharkhand (18.32%) = 7.21 Million or 0.7 Cr
- Madhya Pradesh (16.09%) = 13.72 Million or 1.37 Cr
- Uttar Pradesh (17.5%) = 41.0 Million or 4.1 Cr
Just these 4 states will give you a total of 95.75 Million people or 9.57 Cr people with schooling deprived. The number will be higher if you calculate other states too.
The total population of Some European Countries
- Germany - 83.2 Million or 8.32 Cr
- France - 67.7 Million or 6.77 Cr
- UK - 67.3 Million or 6.73 Cr
We have a severe problem on our hands to solve. This transformation where we need to move people (213 million Labor force) from Agriculture to Industry requires proper Education / Skillset training, which will take a decade or two.
Niti Aayog 2021 based on National Family Health Survey 4 (2015-16)
School Attendance
A household is deprived if any school-aged child is not attending school up to the age at which they would complete class 8.
The indicator for school attendance is the logical precursor to the indicator for years of schooling. A child not attending school is indicative of both the presence of deprivations experienced by the household and the possible future deprivations that may result from the child not attending school. A child not attending school is symbolic of a more significant set of deprivations being experienced by the household that impedes the child's education. Similarly, because the child is not attending school, the household members will be deprived of the positive externalities of having a formally educated member.
An individual living in a household with at least one child not attending school is treated as deprived in this indicator, even though they may have completed schooling.
I introduced this chart because it has provisional data from National Family Health Survey-5 2019-20. The critical issue is the same whether the data is from NFHS-4 or NFHS-5. The Northern States need to do a lot in terms of Education and Healthcare. You can compare that with Kerala and Tamil Nadu.
- Bihar (Population 2021 - 126.7 Million / 12.67 Cr)
- Uttar Pradesh (2021 - 234.7 Million / 23.4 Cr)
- Rajasthan (2021 - 81.18 Million / 8.11 Cr)
- Madhya Pradesh (2021 - 85.3 Million / 8.53 Cr)
- Jharkhand (2021 - 39.4 Million / 3.94 Cr)
Niti Aayog 2021 based on National Family Health Survey 4 (2015-16) & National Family Health Survey 5 (2019-20)
Niti Aayog - % of Population Poor in Each State
Multidimensionally Poor
Multidimensional poverty encompasses more than just lack of income and considers other factors such as lack of access to basic needs like education, healthcare, and clean water. For instance, a family living in a slum with inadequate housing, limited access to clean water, no healthcare or education, and facing discrimination would be considered multidimensionally poor, even if their income was above the poverty line. In short, multidimensional poverty looks beyond income to capture the various dimensions of deprivation that people experience.
In September 2015, the United Nations General Assembly passed a resolution establishing the 17 Sustainable Development Goals (SDGs). SDG 1, which aims to "End poverty in all its forms everywhere," has multiple dimensions and definitions. Target 1.1 of SDG 1 seeks to eliminate extreme poverty, measured as people living on less than $1.25 daily (later increased to $1.90/day). Meanwhile, Target 1.2 aims to reduce multidimensional poverty, as defined by national definitions, by 50%.
Those SDGs are in the Niti Aayog Report State of States 2021. Kerala (#1) got a score of 83 (SDG1 - No Poverty), while Bihar (32), Jharkhand (36), and UP (44).
- Bihar (MPI Poor 51.91%) = 65.75 Million or 6.57 Cr
- Jharkhand (MPI Poor 42.16%) = 16.58 Million or 1.65 Cr
- Uttar Pradesh (MPI Poor 37.79%) = 88.69 Million or 8.86 Cr
- Madhya Pradesh (MPI Poor 36.65%) = 31.26 Million or 3.12 Cr
That's a total of 202.28 Million or 20.22 Cr people multidimensionally poor from the first 4 states combined, which is close to the total population of Maharashtra (128.5 Million / 12.85 Cr) and Tamil Nadu (82.07 Million / 8.20 Cr) combined.
Niti Aayog 2021 based on National Family Health Survey 4 (2015-16)
Multidimensional Poverty Index - 2021
NFHS 5 - 2019-21 (National Family Health Survey)
Look at indicators 16 and 17, which reflect the overall Education system the states implemented. Over 50% of the population has not gone beyond 10 years of schooling. The Infant Mortality Rate (Indicator 26) is 35.2 per 1,000 live births, reflecting the overall health. In the developed nations, this indicator is in single digits as per the data from World Bank.
- United States: 5.5 deaths per 1,000 live births
- United Kingdom: 3.8 deaths per 1,000 live births
- France: 2.8 deaths per 1,000 live births
- Germany: 2.9 deaths per 1,000 live births
- New Zealand: 3.7 deaths per 1,000 live births
- China: 6.8 deaths per 1,000 live births
Kerala is the only state with Infant Mortality Rate in a single digit - 4.4 deaths per 1,000 live births per NFHS-5 2019-20 data which is better than the US (5.5) and close to the UK (3.8). The Infant Mortality Rate in Urban areas in Kerala is 3.5 / 1,000 live births and 5.2 in Urban areas. As per WHO (World Health Organization), Infant mortality represents an essential component of under-five mortality. Like under-five mortality, infant mortality rates measure child survival. They also reflect the social, economic, and environmental conditions in which children (and others in society) live, including their health care.
NFHS 5 - 2019-20 Kerala and Tamil Nadu
Kerala - 3.48 Cr / 34.84 Million people (2021)
- 51% have health insurance
- 75% have 10 or more years of schooling
- Infant Mortality Rate is 4.4 per 1,000 live births
- Total Fertility Rate 1.8 (Children per woman)
- https://www.census2011.co.in/census/state/kerala.html
Tamil Nadu - 8.20 Cr / 82.07 Million People (2021)
- 71% have health insurance
- 58% have 10 or more years of schooling
- Infant Mortality Rate is 21.7 per 1,000 live births
- Total Fertility Rate 1.8 (Children per woman)
- https://www.census2011.co.in/census/state/tamil+nadu.html
NFHS 5 - 2019-20 Gujarat and Maharashtra
Gujarat - 7.07 Cr / 70.7 Million people (2021)
- 39% have health insurance
- 40% have 10 or more years of schooling
- Infant Mortality Rate is 31.2 per 1,000 live births
- Total Fertility Rate 1.9 (Children per woman)
- https://www.census2011.co.in/census/state/gujarat.html
Maharashtra- 12.85 Cr / 128.5 Million People (2021)
- 20% have health insurance
- 55% have 10 or more years of schooling
- Infant Mortality Rate is 23.2 per 1,000 live births
- Total Fertility Rate 1.7 (Children per woman)
- https://www.census2011.co.in/census/state/maharashtra.html
NFHS 5 - 2019-20 Jharkhand and Madhya Pradesh
Jharkhand - 3.94 Cr / 39.4 Million people (2021)
- 50% have health insurance
- 40% have 10 or more years of schooling
- Infant Mortality Rate is 37.9 per 1,000 live births
- Total Fertility Rate 2.3 (Children per woman)
- https://www.census2011.co.in/census/state/jharkhand.html
Madhya Pradesh - 8.53 Cr / 85.3 Million People (2021)
- 38% have health insurance
- 35% have 10 or more years of schooling
- Infant Mortality Rate is 41.3 per 1,000 live births
- Total Fertility Rate 2.0 (Children per woman)
- https://www.census2011.co.in/census/state/madhya+pradesh.html
NFHS 5 - 2019-20 Bihar and Uttar Pradesh
Bihar - 12.67 Cr / 126.7 Million people (2021)
- 15% have health insurance
- 36% have 10 or more years of schooling
- Infant Mortality Rate is 46.8 per 1,000 live births
- Total Fertility Rate 3.0 (Children per woman)
- https://www.census2011.co.in/census/state/bihar.html
Uttar Pradesh - 23.4 Cr / 234.7 Million People (2021)
- 16% have health insurance
- 44% have 10 or more years of schooling
- Infant Mortality Rate is 50.4 per 1,000 live births
- Total Fertility Rate 2.4 (Children per woman)
- https://www.census2011.co.in/census/state/uttar+pradesh.html
Niti Aayog - 2021: Industry and Zero Hunger
Top States In Industry, Innovation & Infrastructure
Gujarat, Tamil Nadu, Punjab, Goa, Haryana, & Maharastra are the Front Runner (Top) States. You expect the Wealthiest industrialized states will have the least Zero Hunger. You will be surprised in the next section on Zero Hunger.
Top States in Achieving Zero Hunger
The wealthiest Industrialized state is the worst in Zero Hunger SDG Category! This clearly shows that the Southern states followed a Pro People based Economy instead of Pro Capital. That's why Southern states tops in the Human Development Index.
Conclusion
In the overall ranking of the states, Kerala, Tamil Nadu, Andhra Pradesh, and Karnataka rank #1, #2, and #3, while Telangana ranks #6.
The following data (Map of India) from Niti Aayog shows that Kerala, Tamil Nadu, Himachal Pradesh & Uttarakhand (in Green) are the leading States in Education.
The Government of India has recommended that states spend at least 6% of their Gross State Domestic Product (GSDP) on education. This guideline was first established by the Kothari Commission in 1966 and was reaffirmed by the National Education Policy (NEP) 2020. As per National Health Policy (NHP) 2017, 2.5% of GSDP must be spent on Healthcare.
The other states must focus on spending at least 6% of GSDP on Education and 2.5% of GSDP on Healthcare. Moving the workforce (213 Million / 21.3 Cr people) from Agriculture to Industry will be impossible without a good education and Healthcare.
Most states (other than the Southern States) spend less on Education and Healthcare as a percentage of GSDP (as per the National Policies NEP/NHP).
Turning around a society with better education and skill set required for modern Industrial and Service based and Knowledge-based societies takes a decade or two. Education and Healthcare are State Subjects. So, it's a long-term investment the State Government needs to focus on.
India's Population demographics
- 0-15 years: 25.8% - 361 Million or 36.1 Cr
- 15-49 years: 52.2% - 730.8 Million or 73.08 Cr
- 50 and above: 22.0% - 308 Million or 30.8 Cr
As per the NFHS-5 2019-20, India Key Indicators, 50% of the population (age 15-49) have less than 10 years of schooling,
i.e., 365 Million or 36.5 Cr people.
Building just infrastructure will not solve the critical problems of Society. Along with infrastructure, there should be a more significant emphasis on
- Education / Skillset Focus
- Healthcare
- Women Empowerment
In the last 350 years of world history, no country has become a developed country without focusing on the above three critical elements.
Kerala and Tamil Nadu have been at the Top for the last 2-3 decades because both states followed a Human Oriented Economy.
In the last two maps of India (Education - Performance of States SDG 4, Composite SDG India Index - Overall Performance), you can see Kerala and Tamil Nadu stands out. It's time other states learn the best practices from Kerala and Tamil Nadu and adapt that to their environment. The key is to put more money (% of GSDP) into Education and Healthcare.
Watch the (next section) interview of Ashoka Mody (Former IMF and World Bank Economist. Visiting Professor at Princeton University) & Palanivel Thiaga Rajan, Finance Minister of Tamil Nadu, in the last six months. He discusses various topics regarding Education, Healthcare and GST, and Federalism.