Debunking Deepak Bagla’s hype

Beyond claims of high FDI, why are our own businessmen afraid to invest in India?

A recent speech by the head of Invest India, Deepak Bagla, has gone viral on social media. It is a wonderful exercise in boosterism, telling the world—especially potential investors—about the wonderful opportunities in India, our demographic advantage, rate of growth, burgeoning FDI and more. As an Indian, I felt a warm glow listening to it, and pride that we had achieved so much and had so much to offer the world. (For the very few who may somehow have missed the WhatsApp forwards, just google Mr Bagla’s name and the words “Treasury” and “2023”.)

All of us want to believe the best about our country. It is a welcome change not to be hearing the relentless negativism of our politics, hate-speech emanating from ruling circles and the deafening silence of the government when minorities are attacked, women are raped, innocent people are lynched and so on. But can we afford to delude ourselves that the rosy picture Mr Bagla paints is the full story of our India, even overlooking political and social issues and just focusing on economics?

A number of simple, uncontested facts and figures Mr Bagla does not mention come to mind: How much of our heady GDP growth can simply be attributed to population increase? In 1960, our population was 445 million, and we had a GDP of $37 billion; in 2020, it was about 1.4 billion, and our GDP was almost $3 trillion. So over 60 years, our population multiplied by three and our GDP by eight. This is no different from the way global GDP grew; exponential growth of this kind is not only not unusual, but typical. Much of our growth, in other words, was due to an expanding population, including a growing labour force.

The government tells us proudly that it distributed free food grain to 80 crore, or 800 million, Indians. If so many Indians required free food grain, does that speak of a glowing economic success story or a painful increase in poverty? Reports suggest that as many as 40 million, or 4 crore, Indians have sunk below the poverty line in the last four years, adding to the numbers of absolute poor.

The claims about FDI flowing into India at a record high rate have been contested—the $532 billion coming into our country in seven-and-a-half years is not borne out by the figures issued by reputable international bodies. But beyond the claims of high FDI, why is it that over the same period, private sector investment in India, as a proportion of GDP, has stagnated? Why are our own businessmen so afraid to invest in India, as Mr Bagla wants the world to do?

Some 8,000 high net worth individuals (that is, people with assets exceeding a million US dollars) have emigrated out of India last year (the third highest such exodus in the whole world). Does this suggest India is a good place to invest and flourish, or rather that many of the rich feel they cannot thrive in the business conditions here?

We can boast about our demographic dividend of a youthful working-age population ready to be the work-engine of the world, but what have we done to train and skill them to seize the opportunities offered by the 21st century? Most of the unemployed are unemployable because they have dropped out of school by the ninth grade, learned very little before then and failed to acquire usable skills thereafter.

Worse still, the numbers of educated unemployed testify to the irrelevance of much Indian college learning. Kerala’s Employment Exchange lists about two lakh professional and technical job seekers as of 2022, including 6,000 medical doctors and 44,000 engineering graduates. Of the rest, some 71 per cent of them are ITI certificate or diploma holders. Highly literate and educated Kerala’s youth unemployment stands at 42 per cent. What hope can we offer them?

And, finally, and perhaps, most damningly, a total of 1,83,741 Indians have renounced their citizenship this past year, as the government officially informed the Lok Sabha. Why would so many do that, if India was shining for them?

It’s wonderful to hear Mr Bagla, and always pleasant to feel good about ourselves. But if it becomes a substitute for thinking seriously about our nation’s challenges, it can only hurt us. India needs hope, not hype.