Is it not the time to think beyond GDP?

Dr B K Mukhopadhyay

(The author is a Professor of Management and Economics, formerly at IIBM (RBI) Guwahati. He can be contacted at m.bibhas@gmail.com)

India’s gross domestic product (GDP) grew at 6.1 per cent in the last quarter of the previous fiscal (2022-2023). Further, the Centre now estimates the overall growth rate of FY23 to be 7.2 per cent.

So far so good. But the question now is are we not wasting much of the time and energy in calculating / comparing the GDP growth rate and at the same time locating whose assessment should be taken as more realistic on this score?

As the things stand now, going by its intensity, incidence and severity, the very issue of poverty, backwardness and social exclusion in many developing countries continues to be very crucial one in as much as despite the fact that many of the nations are rich in natural resources the people remain poor. Either planning remains in paper or the projects are started well but left in the lurch thereafter. Very correctly the World Bank referred to this situation as poverty in the midst of plenty. In many of such economies the programs for poverty alleviation are seen not to be making significant impacts. It is high time that the fruits of growth come down at the micro-level. The reality truly reflects the position - poverty and social exclusion continue to exist as a serious problem and the rural areas continue to be the worst affected. Crucial needs such as health care, public transportation, supply of drinking water, all-season roads and primary schools are urgently required to solve multidimensional poverty and backwardness in the imbalance regions.

The governments should look into the problem in more detail and depth in areas relating to housing, sanitation and other rural infrastructure for the alleviation of rural poverty. Side by side the urban poverty incidence continues to create manifold problem inclusive of haphazard growth of the regions.

Dr Amartya Sen very judiciously relates poverty to entitlements, which are taken to be the various bundles of goods and services over which one has command, taking into cognizance the means by which such goods acquired. Better not forgotten that poverty arises due to insufficiency of different attributes (such attributes are health, literacy, housing and access to public services) of well being that are necessary to maintain a subsistence level of living. Bringing in economic inclusion in the true sense of the term is a complex and time consuming process and as such any haphazard or myopic move will simply push back the endeavours and nothing more.

Obvious enough, there can be no denial as to the fact that the governments at all levels embarked on several programs in order to alleviate incidence of poverty and its severity. Side by side, given the low response of households to escape from the scourge of poverty, it can be said that many of these programs have failed to make significant impact. That is why poverty, social exclusion and sub-regional backwardness are better countered as a multidimensional phenomenon of which income is definitely one aspect.

With multidimensional approach it is possible to identify the main causes of poverty, backwardness, social exclusion so as to adopt realistic policies to reduce the intensity by viewing development as improvement in an array of human needs and not just growth of income since well-being is intrinsically multidimensional from the viewpoint of capacity and functioning.

It is better appreciated that we are running much behind the time. Immediate attention in adequate quantum is therefore to be paid to ensure the distributive justice so that everybody gets access to the growth results, getting duly involved into the processes, which, in turn, could help in implementing the socio-economic policies aimed at reducing poverty diffusion. Reforms efforts should be directed towards education, women empowerment, improving the status of those employed in agriculture, and improving the housing/sanitation conditions. It is high time that the governments embark on programs that would encourage people to take up especially market-friendly farm (agriculture plus allied) activities, as their multidimensional poverty is higher than those in other sectors in rural area.

And at the same time lean heavily on infrastructural development coupled with boosting the quality backed primary education and ensure that healthcare facilities in the rural are within the reach of the rural people as it is already well established that multidimensional poverty and backwardness decreases with increase in the educational level of the house head and increases with increase in age and household size. We are already too late in ensuring that the dilapidated health facility is rehabilitated since healthcare, public transportation, supply of drinking water, food, all-season road, and primary education are urgent and important at this stage in solving the multidimensional poverty / low level of human productivity in the rural areas. It is better not forgotten that housing / sanitation and economic condition / security are no less main factors responsible for continuous backwardness.

There is, thus, the crucial need to assess the entire task lying ahead from comprehensive angle, especially from the point of view of capability of functioning in as much as the capability aspects view individual well-being in terms of what a person is actually able to do or to be, given the set of functional support by the institutional framework as capabilities essentially calls for combinations of beings and doings that a person can achieve and reflect the real set of options that a person has to achieve, what she or he values and thus includes the freedom of choice. Functioning are the valuable achievements, actions and activities that ultimately determine individual well-being and as such functioning ultimately refers to the use a person makes of the commodities at his or her command backed by the support system as are or to be extended temporally, spatially, functionally and hierarchically.

To conclude, in Chiappero’s logical and pragmatic thinking – “Functioning achieved are strictly related to the intrinsic characteristics of the people (age, gender, health and disability conditions) as well as to environmental circumstances (at the socioeconomic and institutional level but also referred to the household environment); and the conversion process of the available resources into well-being is strictly related to and dependent on these individual and environmental features”.

So it is now better to respond to the reality in the overall sense – growth with development.