Why is India the largest poverty country in world?



Piyush Gupta, studied at Nagindas Khandwala College of Commerce & Arts

Here are some of the reasons why I think India is poor

1. Poor Education System

This is the biggest reason why India is poor. Some of you might argue that India has best Education Institutes like IIT and NIT, but lets face it, not everyone goes to IIT's or NIT's. Moreover, a lot of IIT's and NIT's wish to work abroad because they don't get the best opportunity here(well, this is a different problem altogether). But, we DO have a poor education system. Most of the Schools are opened not to provide better education, but they are setup to loot parents. Students are still beaten in schools. Local colleges are to their worst in studies. They don't have qualified teachers, they don't provide better Infrastructure. A lot of students end up in Call Centers(its a dream job for some of them), sales agencies, etc




2. Almost everything in India is biased

Well, we have a special word for this term: 'Jugaad'

One of my friend applied for TC(Ticker Collector) job. As far as I remember, he was not that smart than other guys who appeared for the exams along with him.

But still, he managed to get the job because his uncle and his cousin brother were Ticket Collectors. He paid 1 lakh as bribe and got the job.

Fun-Fact: A lot of brokers are involved in the selection process. They usually ask for 6 lakhs - 8 lakhs as bribe.





有趣的事实:很多经纪人都参与了选人过程。他们通常要求60 - 80万卢比的贿赂。

3. Inequality

Lets face it, government just says that 'EVERYONE IS EQUAL'. They want us to believe that Everyone is equal despite of cast, creed, race, etc. But do they follow this?? They have special quotas for OBC, SC and ST student.

Obviously, government wants to support them, but I've seen a lot of (rich)people pay lakhs to rupees to get  OBC certificate. They tend to use these government scheme to benefit themselves too.


让我们面对现实吧,政府只说‘人人平等’。他们希望我们相信不管他们的种姓、信仰、人种等是什么,每个人都是平等的。他们对OBC, SC和ST学生提供了特殊的配额。


4. Everyone is busy looting

I am from Mumbai, so we have Reliance Energy as the dominant Electricity Supplier, and this company is charging like HELL. My Neighbor received a Electricity bill of 4000 INR a month and everything he has at home is a TV, a Tube-light and a fan. I received a bill of 3000 INR (normally it used to be about 650 INR).


我来自孟买,所以我们的信实能源是主要的电力供应商,而这家公司的收费简直是添加。我的邻居每月收到4000卢比的电费,他家里只有一台电视,一个管灯和一台风扇。我收到了3000 INR的账单(以往正常只要650 卢比)。

译文来源:三泰虎    http://www.santaihu.com/46475.html       译者:Joyceliu

5. Government don't want our country to improve

Here are some of the roads in Mumbai. Mumbai is said to be the Economic Capital of India





Balaji Viswanathan, Indian by Birth. Indian by Thought.

Let us get the inequality out of the way, first. Here is the chart of "gini coefficient" that is the international standard for measuring inequality. Low scores mean low inequalities. Except for the Scandinavian countries & Japan, very few others fare better than India in this score. Also, any fast growing country cannot avoid some level of inequality. Growth will always be unequal. Even the Scandinavians were a lot unequal during their growing stages (couple of centuries ago).

In short, our problem is not one of things shared unequally, but one of not enough things to share. We started worrying about inequality too early.

Causes for our poor growth:




1.After the World War II in 1940s, when most Asian countries got freed, there were a group of countries that when on socialism and others leaned on a capitalistic path. The latter group (included S. Korea, Thailand, Japan, Singapore, Malaysia, etc) was able to significantly outperform the former (, India and Vietnam). saw the folly of socialism by 1970s and Deng significantly modernized started from 1970s. However, we were stuck to failed ideas of socialism way too long. See 's economic curve diverging from India's in late 1970s.



2.Poor leadership. In 1947, unfortunately, Nehru became a premier of India trouncing over more effective leaders such as Patel and Rajaji. Nehru had little clue of economics and little appreciation for entrepreneurship. He focused little on rural sector, agriculture or primary education. He was trying to build himself a stature in international politics with the failed NAM initiative and really failed in the domestic arena.


3.Poor direction on liberalization. Think about the top paying jobs in India. They would be in technology, outsourcing services, finance, advertising and other services where government has given freer room for entrepreneurs to operate. However, when it comes to mass employment generation sectors of agriculture or retail, we have kept our cards way too close and have not liberalized at all.


4.India took on to de ocracy far too early. Most rich nations subverted de ocracy during their growth stages. Great Britain of Dickensian era, USA of gilded age, Japan during the imperial era, Thailand, S.Korea before 1979, Singapore during Lee Kwan Yew's era, all had autocrats or crony capitalism. We kind of put cart before the horse by our early adoption of de ocracy. We could still win, but we are into an uncharted territory. No other nation has built up their economy as fast in a perfect de ocracy. This point is controversial though.


5.Finally, there are many Indians. The India of the middle and upper class is a different one. And we have been in "poverty thought" way too long and it has not helped. When we were long in school, my friends used to talk about India as "It Never Develops in Anything" and that kind of attitude got us nowhere. It is good that we are coming out of that "poverty trap". You cannot win by just focusing on your negative attributes.



Ashutosh Mehndiratta, Curious Indian

Wealth and Poverty are relative terms. When we say India is so poor, it is in reference to the countries that we consider wealthy. While it's important to study why India is poor (and the answers on this thread have pretty much covered it), it's equally important to study why some countries are wealthy.


How did wealthy nations become wealthy? Few common traits of wealthier nations are that they are industrialized, have high literacy levels, replacement population growth rate (~ 2.0 births per woman) or even lower, have robust institutions (political, financial, legal) regardless of their geography and arguably culture. As these countries developed, their work force shifted its focus from agriculture to manufacturing to services. Economists have called the onset of Industrial Revolution in late 1700s to early 1800s as a key point of economic divergence between countries of the world. Despite having colonial empires, European countries were still not too far ahead of countries like India and in 1600s and 1700s. Things simply took off when machines could do tasks at a mind boggling speed compared to humans. Industrial Revolution began in the UK and was picked up by Germany and France and subsequently the US and other Western nations. Later Japan followed by South Korea and recently followed suit and witnessed exponential economic growth. These countries then get in a positive loop.


India's situation - India on the other hand is caught in a negative loop of 'Overpopulation-Illiteracy-Corruption-Poverty'. With a denominator of 1.25 billion population, even if we apply it to GDP of the mighty US, on a per capita basis it drops to ~ $14,000 and that would drop US' rank to 50th in the world! So population matters. In 1947, India's population was around 300 million and we have quadrupled since then. It will peak around 1.7 billion in the next 25 years. Population growth is inversely proportional to Literacy. The poorest states in India have the lowest literacy levels and the highest fertility rates.


Post-independence roadmap - Pandit Nehru was a brilliant man but not an economist. His economic vision turned out to be flawed and we ended up with useless Planning Commission and their 5-year plans as well as License Raj that choked India's potential. But to be fair to him, we have to realize that his tenure was only 17 years before he passed away in 1964. The initial years of his leadership  post-Independence were spent battling post-partition issues and getting basics in place. His successors should carry a larger blame for the Hindu rate of growth from 1964 all the way till early 90s.

Today India is in a unique position where 60% of workforce is engaged in agriculture compared to less than 5% in developed countries and has sort of skipped a boom in Industry/Manufacturing and jumped to a booming Services sector. But services sector is not able to generate employment for the 12 million Indians that enter the work force each year. Therefore, manufacturing has to be the way to go. PM Narendra Modi has correctly identified 'Make in India' as a top priority and hope he is able to execute this vision.

Where is India headed? Fortunately, situation has been improving rather drastically.





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