The artificial classifications of the World Bank and IMF at best serve their limited institutional purposes ~ to determine for eligibility of poorer developing countries for concessional loans, favourable trade terms etc., and for phasing these countries in or out of aid windows. They may provide a framework for organising global macroeconomic data but suffer from many serious flaws. They ignore inequality ~ the USA has a high per capita income of $84000, but is a highly unequal country where the richest 1 per cent of households own almost 30 per cent of the nation’s total wealth, while the bottom 50 per cent hold only about 3 per cent.
The top 10% own more than two-thirds of total wealth, and this share has increased steadily over the decades. In contrast, Japan, also an advanced economy, has low inequality. In our dream of Viksit Bharat, do we want an unequal society where a million billionaires account for 80 per cent of the nation’s GDP? The classifications also ignore social outcomes ~ South Africa and Vietnam have similar income levels but vastly different inequality and employment structures. They ignore human development and economic structures, and cannot distinguish between a diversified modern manufacturing economy with a high skill base like China, an upper middle-income country, from Saudi Arabia, a high-income rentier state that is dependent on a single commodity, oil, and has very narrow domestic skill base.
A singly-commodity export dependent country has very different development prospects from a diversified economy, even though both may be at the same income levels. There are many such examples ~ South Korea vs. Kuwait, Norway vs. Qatar ~ all high-income countries yet vastly different in diversification and skill. Nobody would advocate an economic structure like that of Saudi Arabia, Kuwait or Qatar for a Viksit Bharat. Vulnerability to external shocks, productivity growth and income and employment are all structural features invisible in income averages. They also ignore the capacity of the states to deliver public goods such as access to quality healthcare, education, social protection, etc. that depend not just on income but on state capacity and policy choices, which often lag income growth.
This brings us to the fundamental question, what exactly is development and what kind of development do we want for Viksit Bharat? True development must be multidimensional, encompassing not just purchasing power but health, education, opportunity, job, dignity, security, inclusion, and a whole lot of other things. Income of course is important as higher income levels are strongly correlated with better health outcomes, higher educational attainment, and greater state capacity. Even the UNDP’s widely-reported Human Development Index (HDI) which gives equal weightages to income, health and education is imperfect because of this strong correlation ~ it automatically favours countries with higher income. As a single-number summary, income remains one of the most powerful predictors of average living standards, and is necessary for development, but not a sufficient condition. Further, the Western concept of equating money with well-being is not relevant for India and many other countries.
Income gains do not automatically translate into improved well-being without adequate investments in human capital and building institutional capacity. True development will shift the focus away from income growth to build a diversified, resilient, inclusive economy, not bound by the narrow definitions of outdated institutions like the UN, World Bank or IMF which have outlived their utility and are unfit to address the realities and complexities of a world that is unrecognisable to the one in which they were created. A State’s performance is judged by the coverage and efficiency in its delivery of public goods, and for that we need not be a high-income country. It depends more on the state’s capacity and vision more than income.
Poverty still prevails in India, but absolute poverty seen in the 1970-films of Mrinal Sen or Ritwik Ghatak is certainly a thing of the past. Nobody dies of hunger in today’s India, thanks to the food security provided by the State. The quality of education in public schools falls way short of expectation, but almost all children attend schools where they get at least one nutritious meal every day. Quality of public health delivery is way below optimal, but everybody has access to healthcare and thanks to Ayushman Bharat, families do not fall into poverty due to medical expenditure. Welfare benefits reach every household without leakage, law and order is generally stable, and good quality roads and electricity are available even in the remotest villages.
By and large, institutions function as they should, elections are fair and free, and press is freer than in most countries. All these have been achieved at a low-income level, demonstrating that income is a weak proxy for the well-being of citizens. Developed countries also offer all these and quality is an equal concern with them too. The UK National Health Service is in a deep crisis where patients wait for weeks if not months to get an appointment. The public healthcare systems in the USA, many European countries, or South Korea are under deep stress due to inadequate finance, as are their public transportation systems which are “on the edge of a cliff” due to shrinking funding. The abrupt collapse of institutional mechanisms being seen in the USA now make our systems feel vastly superior.
One may then question why we should be considered undeveloped just because our per capita income is low? Of course, this is not to say that we have no problem – starting with unemployment and issues of quality, the inventory of our problems would be a long list, but addressing them is aspirational and a continuous, ongoing process. While sustained high growth and continuous rise in per capita income remain central to the idea of Viksit Bharat, the idea of Vikas must go much beyond these. It must be the vision of a future in which India is not only an economically richer, militarily stronger, technologically advanced, strategically autonomous, environmentally responsible, and institutionally strong digital superpower, but also one in which every citizen feels empowered and included in the process of development.
The government’s vision of Viksit Bharat@2047 conceptualises it as a high-income inclusive society in which economic growth would be structurally transformative, based on eight interconnected pillars of economic transformation, digital empowerment, social inclusion, education and skill development, healthcare for all, developed infrastructure and urban growth, sustainable development, and citizen participation. A defining feature of this transformation would be technology-led governance and innovation. Digital public infrastructure is positioned as a scalable model for service delivery, financial inclusion, and state capacity enhancement, especially in strategic sectors such as clean energy, semiconductors, artificial intelligence, and advanced manufacturing.
Institutional reform and cooperative federalism occupy a central place in this vision, and states are viewed as key drivers of development. Finally, sustainability and global engagement are integral to the vision. Climate resilience, energy transition, and India’s role in global governance are seen as inseparable from development. The agenda for Viksit Bharat is thus multi-dimensional and transformative, moving beyond income metrics to emphasise capability, resilience, and institutional strength, not framed solely through economic or technological metrics. Even then, it would be incomplete if we are unable to integrate our civilisational ethos into the scheme of Viksit Bharat. This includes the Chaturvarga: Dharma, Artha, Kama and Moksha.
Translated into the language of governance, Dharma means that ethics and morality must inform governance and all public policy, integral to which would be transparency in public finance, accountability, social justice and individual responsibility, where long-term public goods would be prioritised over short-term political gains. Artha would imply economic growth that would lead to Sarvodaya ~ the upliftment of all including the most vulnerable, rather than the inefficient Western concept of trickle-down development, and technological progress would reduce, not deepen, social inequalities.
Kama would mean fulfilment of aspirations, Artha and Kama. Moksha would imply union with nature in which harmonious and purposeful living would underpin all development, treating the environment as a living entity, preventing material prosperity from becoming aimless. This civilisational template would be a moral and cultural compass to navigate modernity to realise ancient India’s universal peace mantra, Sarve Bhavantu Sukhinah/ Sarve Santu Niramayah/ Sarve Bhadrani Pashyantu/ Maa Kashchit Duhkhabhag Bhavet. Om Shanti, Shanti, Shanti
(The writer is a commentator, author and academic.Opinions expressed are personal)