April 27, 2016

Target 10 Trillion GDP in 2032 and the Invisible Gorilla

Visiting Fellow, Shankkar Aiyar writes in the Indian Express:

 

"This week, Niti Aayog put out a perspective on where it sees India in 2032. It is not called a plan, nor is it called vision-whatever.  It is simply titled ‘Creating a Movement for Change’. Without much ado, it lists aims, objectives and an agenda of sorts. Conventional wisdom suggests forward plans must cover a time horizon of five, 10, 20 or 25 years. This perspective—curiously—looks at a 16-year horizon. You could call it Mission 2032—the grand ambition of the Modi Sarkar...

Consider its most striking objectives. It envisages India to be a $10-trillion economy by 2032 and a @NITIAayog tweet declares, “Our aim: To create 175 million jobs & achieve zero per cent BPL population by 2032...The question that begs an answer is whether the promise is backed by premise. In a seminal study, The Invisible Gorilla, Christopher Chabris and Daniel Simons reveal and elaborate on what they call 'the illusion of attention' and the limitations of awareness. Mission 2032 is a well-intentioned and ambitious document that lists many granular details, but is intriguingly silent on macro issues—on necessary and sufficient conditions that are required to make the agenda happen...It bears mention that there is only one country in the recent past that has grown its economy at a sustained 10-plus per cent rate—namely, China....

The document is silent on the global factors that impede and propel growth. Consider the other challenge: creating 175 million jobs in 16 years, that is 10.9 million jobs a year. The answer is data-dependent. And employment data, as this column illustrated recently, is in the domain of known-unknown. Between 1999 and 2004—the Vajpayee years—India did create nearly 60 million jobs in five years. Again, if one looks at the economic census for the period 2005-2013, India created 36.2 million jobs in eight years—and that would run well short of the target...

To be sure, Mission 2032 enumerates the many moving parts that will make the economy accelerate. It does list many steps that have been taken. For instance, the progress achieved on financial inclusion, the initiatives on direct cash benefit transfer, higher investment on railway and roadways, on food parks and so on. The perspective, however, is eloquently silent on the big gorillas that haunt outcomes in the political economy—for instance, the concurrent authority structure that precludes efficiency at the Centre and in the states".

 

Click here to read the article.

Topic : Transitions / In : OP-EDS
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