Great Indian Paradox: Marginalised Groups’ Economic Optimism At Odds With Facts

That a majority of Indians think the country has fared better than expected economically may be too good to be true.

7 min read
Great Indian Paradox: Marginalised Groups’ Economic Optimism At Odds With Facts

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The dominant media narrative, often for justified reasons is that India since independence has remained a chronic under-performer. This third of the 26-part series on 75 years of independence and partition highlights that a majority of Indians think the country has done much better than expected on most indicators.

India has always been a land of bewildering paradoxes with a clear divide in perceptions about the past and contemporary realities. While the commentariat class continues to express frustration and exasperation at the number of times India has missed the bus, the ordinary Indian somehow retains a positive perception of the past as well as the future.

This stark divide was vividly revealed during a one of its kind survey of citizens of India, Pakistan and Bangladesh to mark 75 years of independence and partition of the Indian subcontinent. This ambitious survey was conducted by CVoter as part of a collaborative effort between the C Voter Foundation and the Centre for Policy Research.

The first write-up focused on the broad results of the survey; the second on how Indians view Pakistan, Bangladesh, and the rest of the world. This, third, write-up analyses how Indians rate the performance of their country on important social and economic parameters.


Indians & Economic Growth: The Glass Remains Half Full

The most objective and independent analysts would rate the performance of India as middling to average. Yet, ordinary Indians rate it very highly. By any yardstick, the performance of the Indian economy over the last 75 years has been underwhelming.

Till the late 1960s, countries in East Asia barring Japan were poorer than India with lower per capita incomes and lower levels of industrialisation. Yet, virtually all of them have raced ahead of India by registering impressive economic growth for the past few decades.

In contrast, India grew at the notorious “Hindu” rate of growth for decades and it is only after the opening of the economy in the 1990s that India has become one of the fastest-growing economies in the world. The result has been a yawning gap between India and its peers. The per capita income of South Korea is more than 20 times that of India. China has a per capita income that is six times that of India. Even the relative underperformers like Indonesia have substantially higher per capita incomes.

But ordinary Indians seem to have a different opinion. One of the questions in the survey was to rate the performance of the economy over the last 75 years. The responses would startle any economic analyst. Approximately sixty percent of respondents said that performance in terms of economic growth was slightly or way above expectations.

In contrast, less than one in three Indians were of the opinion that performance in terms of economic growth was slightly or way below expectations. However, among religious minorities, the percentage of citizens who rate performance as way below expectations is higher than those who rate it as way above expectations. Some may argue that the responses perhaps highlight the lack of adequate opportunities and discrimination confronting certain sections of the population.


Optimism of Marginial Communities Supercedes Socio-Political Status

Yet, the most marginalised and historically oppressed sections of Indians display unusual exuberance. For instance, there is no longer any argument or debate about the fact that Scheduled Castes (Dalits) and Scheduled Tribes (Adivasis) have historically faced the highest levels of discrimination and oppression. That is not reflected in responses given by the citizens belonging to these two categories.

Two third of the Dalit respondents were of the opinion that India's performance when it comes to economic growth, was slightly or way above expectations while less than one-fourth rated it as slightly or way below expectations. Similarly, close to 55% of Adivasi respondents stated that the nation's performance was slightly or way above expectations compared to about 31% who held the opposite view.

The question threw up another surprise response. Contemporary wisdom is that rural India has been largely neglected at the cost of urban India. Even data clearly indicates that the income levels of rural Indians are far below that of their urban counterparts. Yet, almost three out of every five rural Indians think that performance has been slightly or way above expectations while a substantially lower 52% of urban Indians share the same viewpoint.

This unusual level of positivity and optimism is revealed even during responses to questions related to the present and future economic prospects. Among economic analysts, there seems to be a consensus that India’s growth story in recent years has either stagnated or declined. Critics of the current regime led by Prime Minister Narendra Modi blame “flawed” policies and decisions like demonetisation and a ham-handed implementation of the new GST regime for the slowdown in growth.

Mixed Reactions of Muslims Too Signal Positivity in Future Trends

The supporters of the regime argue that these “disruptive” policies would yield immense long-term benefits to the economy. But every one agrees that the Covid pandemic has had a devastating impact not just on economic growth, but also livelihoods of ordinary Indians. They are probably more evocative than the bald fact that GDP of India actually shrank by almost 8% in the year 2020-21. But the 'never say die' optimism of even marginalised Indians lives on.

The survey asked Indians about the future prospects of the Indian economy as well as of their families. Overall, 46% of Indian respondents exuded optimism while 32% were pessimistic about India’s economic prospects.

More than one out of every two Muslim respondents, displayed pessimism while one-third were optimistic. Adivasis were even more exuberant about the future economic prospects of their families. For every Adivasi respondent who was of the opinion that their family fortunes would be a lot worse in a few years, three were convinced it would be much better.

Even Muslims who hold a dim view of the future of the Indian economy are more optimistic when it comes to assessing the future prospects of their own families. While 43% of them were of the opinion that their family fortunes would be slightly or a lot better, about one-third thought their future prospects would be a little or a lot worse in the next few years. Overall, a majority of Indians were optimistic about the future economic prospects of their families, while two out of every five were pessimistic.

India an Outlier in Global Survey Across Economies?

This level of economic optimism is rare in contemporary times. Across the world, Covid and then Russian invasion of Ukraine has led to massive supply chain disruptions and triggered a near recession in large swathes. Virtually, every survey in developed and emerging economies, reveals that the respondents are worried about their economic prospects. India stands out as an outlier amidst this.

The Reserve Bank of India brings out a bi-monthly Consumer Confidence Report based on a survey. Since March 2020, consumer sentiments about their current economic status have been persistently negative. Yet, for more than a year, the same respondents persistently have said that their family prospects appear much brighter in the near future.

CVoter has been conducting similar surveys for years. Three quarterly reports have been published in a newspaper and CVoter has now entered into an agreement with the Economic Advisory Council to the Prime Minister to conduct surveys an analyse citizen confidence and optimism levels. Since March 2020, two-thirds of respondents have categorically stated that they have been finding it difficult to manage household budgets.


Indians on Economic Present and Future: A Glorious Paradox

Yet, the same set of respondents has been persistently saying that they are quite optimistic about future economic prospects of their family. As subsequent write-ups will show, such levels of optimism are missing when it comes to citizens of Pakistan and Bangladesh. To some extent, hard economic data can explain this divergence in perceptions.

Pakistan's economy is passing through an extremely difficult phase. Inflation, particularly food inflation there has reached devastating levels. Even Bangladesh, whose economy was doing extremely well for almost a decade till the arrival of the Covid pandemic, faces a foreign exchange crisis and some level of food insecurity after decades. In contrast, the Indian economy is chugging along at a nice clip, despite external headwinds impacting the economy.

Most global institutions expect it to remain the fastest growing major economy for the next decade. To that extent, one could understand why Indians are so unusually optimistic. Yet, the level of optimism among Indians perhaps needs deeper sociological analyses.

Historically, upper caste Hindus have been the most privileged community when it comes to access to education and lucrative livelihood opportunities, apart from land ownership and economic well-being. Against that backdrop, it would be interesting to see how this community has responded to the same set of questions.

When asked about the prospects of the Indian economy a few years down the road, 57% of upper-caste Hindu respondents stated that it would be a little or a lot better. When asked about rating the performance of India on economic growth over the last 75 years, about 59% of upper caste Hindu respondents rated it as slightly or way better than expected. That is 5 percentage points more than Adivasis. But that is to be expected as poverty levels in India remained stubbornly high for more than five evades after independence and the biggest victims of this malaise were marginalised communities like Dalits and Adivasis.

Close to 40% of Indians lived in absolute poverty based on the World Bank parameter of USD 1.99 per day of income by the end of the 20th century. By now, that has plummeted to just about 3% to 5%. Even multi-dimensional poverty, which is a more reliable indicator of “quality of life” has dropped from 55% by the turn of the century to about 16% now going by estimates of the UNDP. It does appear as if India is finally catching up and ordinary Indians realise it through lived experience.

Just in case a reader thought this level of optimism is unrealistic, here are some other data sets to mull over. The rating of economic growth over the last 75 years is the lowest among all parameters covered during the survey. Two-thirds of Indians rated performance on infrastructure development as slightly or way better than expected; two thirds ha the same opinion on health and education facilities; close to three out of every four Indian thinks performance in areas like national security and science & technology is slightly or way better than expected. For the economic growth, the performance rating was bout 55%- well below other parameters.

Read the Part II of the story here

(Yashwant Deshmukh & Sutanu Guru are Editors-in-Chief & Executive Directors of C Voter Foundation and Rahul Verma is Fellow at the Centre for Policy Research (CPR), New Delhi. This is an opinion piece and the views expressed are the author’s own. The Quint neither endorses nor is responsible for them.)

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