India At 75 — A Quick Big Economic Snapshot

As we enter the month of August 2022 and approach 75 years of Indian independence, some score-keeping is inevitable, and we must not always get caught up in short term analyses. What is the big picture? Where is the Indian economy headed? As the world’s largest country as soon as next year in terms of population, what happens in India matters not just for Indians but for all humanity.

We can see that India was not only far behind the UK in incomes in 1600, but even fell behind China (though overtook it by a bit in the eighteenth century while still falling in absolute terms) which shows that colonialism of all hues hurt India for a long time. Only in the second half of the nineteenth century and the early twentieth century did India see a mild rise which too was largely reversed just before Independence in 1947.

India has food security (population increased 4x, food production increased about 6x) but not yet energy security — and both this ‘plus’ and ‘minus’ have come to the forefront during the recent rise in inflation/geopolitical tensions. India has much better physical infrastructure though there is still a long way to go.

The stage then is set, both in secular and (critically for the impatient) cyclical terms, for India’s $2,500 per capita market exchange economy to gradually reduce the gap with richer economies including the global frontier aka United States’ $75,000 per capita income — more on that in the coming posts/book that I am currently writing.

This article first appeared here.