THE BLOG

India's Growth Cannot Be Judged on GDP Alone

06/10/2014 10:41 BST | Updated 03/12/2014 10:59 GMT

Following his landslide electoral triumph in May, Narendra Modi's first act as Prime Minister of the largest democracy on earth was to travel to the Kashi Vishwanath temple and offer prayers on the banks of the Ganges.

The act had symbolism that went beyond religion alone. At the heart of Modi's campaign was a promise to clean up the holy river, which is not only one of the world's largest but also one of the most polluted.

The river's polluted waters are relied upon for the daily needs of tens of millions of Indians and serve as a reminder of the considerable challenge the country faces in becoming the modern economy of which Mr Modi dreams.

As its highest growth figures in two years (5.7 per cent in Q2) are lauded by the media, it's easy to forget that India is a country in which 91 million people still have no access to safe water; that's more than ten times the population of London.

This lack of clean water carries with it a heavy cost. Last year more than 186,000 children died from diarrhoea caused by dirty water and the lack of basic sanitation with which over 790 million Indians live.

India is a country bursting at the seams with the ambition, skills and entrepreneurial vigour to become a global economic superpower. But that promise will only be fulfilled when it is able to hand the 400 million Indians living in poverty the tools necessary to lift themselves out of it.

No one could doubt that the work being done by NGOs to support those in most desperate need by providing basic sanitation infrastructure is admirable.

Indeed, I myself recently launched a partnership between Belu Water and the Cobra Foundation -- the charitable arm of Cobra Beer. Together our two companies will be releasing a joint-branded mineral water with 100 per cent of profits from the venture going to WaterAid, supporting clean water and sanitation projects across South Asia.

Contributing to the alleviation of poverty should be a duty to all those of us who have been fortunate enough to have enjoyed success in the world of business, and I am proud to stand among those who are playing their part.

Yet such efforts, vital though they are, can only take India so far. A concerted campaign of investment and infrastructure building from both private and public sectors is needed if India is to rebalance the scales of the country's burgeoning inequality.

The economic liberalisation that took place in the early 1990s yielded enormous benefits for India's urban industrial powerhouses. The likes of Delhi, Mumbai and Kolkata ensured that the world's second most populous nation overtook the UK to rank sixth in billionaire citizens. But while the success story the country's cities gathers pace, more than 800 million rural Indians are in danger of being left behind.

Mr Modi's government is not oblivious to the challenges it faces - its promise to provide every Indian with the basic sanitation that, up until now, has been largely the jurisdiction of organisations such as WaterAid is one of the most crucial of its manifesto.

As India strives to take up China's mantle as the world's manufacturer, its most potent weapon against poverty will be its ability to attract investment from beyond its own shores.

We are on the brink of a decade with the potential to be India's as much, or more, as the last has been China's. But as the economic figures continue to climb for Mr Modi, he must remember the pledges of his campaign and that his success will be judged not only on the riches he creates but also on his ability to lift his country out of poverty.

Lord Bilimoria is the founder and chairman of Cobra Beer, Chancellor of the University of Birmingham and the founding Chairman of the UK-India Business Council.