India’s recent economic growth has been impressive, with a growth rate of 8.4% in the year to the third quarter of 2023. Looking ahead, the country is expected to continue expanding at a rate of 6.5% per year, which would make it the fastest-growing big economy in the world. However, critics argue that India’s growth still lags behind that of countries like China, Japan, and South Korea, which expanded at around 10% per year during their periods of rapid growth.
One of the key factors holding back India’s development, according to a new book by Karthik Muralidharan of the University of California, San Diego, is a lack of “state capacity”. Muralidharan defines state capacity as the effectiveness of government in achieving its goals. Without strong state capacity, simply increasing government spending is unlikely to lead to significant progress. India’s government has shown success in “mission mode” activities, such as organizing elections, but struggles with the day-to-day aspects of governance, such as education and health.
In the realm of education, India faces significant challenges. Three out of five rural children in their fifth year of school are unable to read at a second-year level. This failure rate has actually worsened over the past five years, highlighting the need for improvements in the education system. Without a well-functioning education system, it will be difficult for India to fully realize its potential for economic growth and development.
Healthcare is another area where India’s state capacity is put to the test. The country struggles to provide adequate healthcare services to its growing population, particularly in rural areas. Access to quality healthcare is limited, and many Indians face significant barriers to receiving the medical care they need. Improving the healthcare system will be crucial for India to achieve its potential and improve the well-being of its citizens.
It is clear that India has made progress in some areas, such as economic growth and infrastructure development. However, the country still has a long way to go in terms of improving its state capacity and addressing key issues like education and healthcare. Without strong governance and effective policies, India may struggle to reach its full potential and lift its citizens out of poverty.
Despite these challenges, there are reasons to be optimistic about India’s future. The country has a young and growing population, a vibrant democracy, and a diverse economy that is poised for further growth. By investing in education, healthcare, and other essential services, India can unlock its true potential and become a global powerhouse in the years to come. With the right policies and leadership in place, India has the opportunity to achieve great things and improve the lives of millions of its citizens.
