The United Nation’s re cent proposal to move beyond GDP is a significant step that economic or thodoxy has governed policy making since World War II. In its significant report titled ‘A Compass for Progress for People and Planet’, the UN has evaluated that the world has dangerously depended on an index that didn’t really project human progress in totality.
The dominance of GDP emerged in the 1930s and was solidified in the post-war international order. It became the universal yardstick of measuring a nation’s performance as it offered a simple measure of economic output. In fact, experts opine that this has been a narrow and incorrect conception of collective prosperity. GDP records the value of goods and services produced within an economy and doesn’t reveal how wealth is distributed or whether growth improves lives or whether economic activity is destroying the foundations on which future prosperity depends.
The long-awaited trans formation in the GDP index has come at an opportune time with an attempt to correct the distortions. For India, the implications are considerable as it claims to be the fastest-growing economy with a huge population and workforce. However, it continues to struggle with air pollution, public health outcomes, educational quality, gender disparities, and widening disparities in incomes. China, on the other hand, despite serious concerns regarding political freedom and human rights, performs substantially better across several indicators.
Keeping in view economic challenges and transformations taking place globally, it’s not just about calculating GDP from the present standpoint but also about considering the welfare objectives of the larger population. Well-known economist Prof. Thomas Piketty recently spoke of the Global Justice Project (GJP), wherein the starting point is aspiration in the Global South, particularly in India, to reach the same level of prosperity as the Global North. He said, “We must ban fossil fuels and adopt low-carbon energy,” which needs to be a steady step. This means enormous investments taking place in the next two to three decades in wind turbines and solar panels.
He also said: “We are better off with 1.80C and 5000 euros a month rather than having 10,000 euros and 40C hotter. Once you cross 30C, particularly in a country like India, you are truly heading towards a climate catastrophe – having more income than with such life conditions is hardly very appealing.”
Not just Piketty, many other economists have harped on bringing down inequality and climate disasters. The GDP doesn’t reflect the welfare aspect, or to put it differently, the living conditions of the majority. GDP may be named gross product indicator (GPI), wherein the conditions of the majority are reflected and progress made therein. Similarly, the UN proposal is significant as it doesn’t diminish economic expansion but takes a holistic view of prosperity, judged from the perspective of equitable, sustainable development and capable of improving the masses’ lives.
For populous countries like India, the advice has come at an opportune time to reorient strategies, keeping in view both demands and concerns of the majority, which has to struggle for a living. Recall, Mahatma Gandhi had repeatedly insisted upon humans be ing as a center of planning and development, for development to reach the last man. Achieving socio-economic expansion of a group of businessmen doesn’t project real progress of any country.
Socio-economic transforma tion requires making development objectives a key priori ty. Growth must be inclusive, judicious and sustainable and India must pursue this model in action. Human progress must matter, and ruling dispensations would do well to go beyond GDP and strive for the UN indicators.
