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73 years illustrated in ten charts
The Nutgraf is a 10-min newsletter sent at 10 AM IST every Saturday. It connects the dots and synthesizes one big event in business, technology and finance that happened over the week in India. In a way you’ll never forget.
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Just 10 mins longSynthesis not analysisSometimes memes
What makes a country great? That's what we try to answer today, across five categories.
A paid 🔒 weekly emailer connects the dots and synthesizes one big event in business, technology and finance that happened over the week in India. In a way you’ll never forget. Someone sent you this? Sign up here
Good Morning Dear Reader,
As you can tell, it’s a different kind of newsletter today.
This newsletter does something quite simple. It looks at the events of the previous week and places it in the context of a broader arc. The purpose of this is simple - in a world where the signal and noise sound the same, individual events stop mattering in isolation. Patterns are everything. When something is connected to the other, and the other, which are threaded over a long span of space and time, something special emerges.
Synthesis matters much more than analysis. That’s what this newsletter is about.
In this edition, I’m going to try to do what I do every week, but over a much longer period. Instead of the events of the last week, I’m going to take the events of the past few years. And instead of synthesising it over a few years, we’re going to go back several decades.
Hopefully, by the end of it, we’ll have a clearer story about India.
And for fun, we’re going to do this using ten charts.
Five charts that give us gloom.
And five charts that give us hope.
Let’s dive in.
What makes a nation great?
It’s not an easy question to answer. It’s not like asking what makes an ice-cream great (chocolate), or what’s a perfect movie (The Matrix) or the best B-school (anywhere except IIM Calcutta).
But after some thinking, and some conversations with friends and random strangers on Twitter and WhatsApp, I’ve narrowed it down to five things.
Money
Power
People
Land
Will
So let’s find out how India is doing on these five parameters, over the past several decades. For each of these categories, I found that if one looked hard enough, there’s usually one aspect that fills us with hope, and one that should be cause for worry.
Here they are.
Money
This is the simplest. The more wealth a nation has, the greater it is as a nation. Some of the most obvious metrics have been discussed in detail— India’s per capita GDP (depending on how one defines GDP) has been growing over time, but so has income inequality. India is getting richer, but more Indians aren’t necessarily getting to see it.
However, I was interested in global metrics.
Was there something that India had, with respect to money, that was the best in the world? Better than the world average? Better than, dare I say it, China?
There’s one. It’s an unusual one, but here it is.
Source : International Monetary Fund, Financial Access Survey
The number of commercial bank branches per capita is an unusual metric, but it’s revealing about the depth and the breadth of a country’s formal financial system. Sure, sceptics can argue that China or Singapore have few bank branches per capita because they don’t need that many bank branches, and that having more bank branches is actually a sign of inefficiency.
Yes. Yes. But still...look at where India was in 2004, and where it stands today. For a young, vast country, I’ll take an inefficient but pervasive banking system than the other way around.
No, the thing we need to be concerned about isn’t why we have more bank branches than China, but what these bank branches actually do.
The way it works is this. People need money to start or run a business or buy a home. They go to a bank. The bank looks at the person, analyses their financials, and decides whether to offer a loan or not. Good banks make mostly good decisions and get their money back. Poor banks make bad decisions, often because they are forced to do so even when they know better, and never see that money again.
Generally speaking, when loans go bad, banks record them as non-performing assets (NPAs). This is money that banks don’t expect to recover. Not now. Not ever.
On that metric, once again, India beats most countries across the world.
Source : International Monetary Fund, Global Financial Stability Report.
It was already bad enough as it was.
The fear is that it’s now going to get worse. Much, much worse.
Power
No, this isn’t about political power, or about corporate power, or government power—all of which deserve their own individual newsletters with their own defamation lawsuits.
Instead, this is about another kind of power—one where India doubled its performance in 25 years.
Source : World Bank, Sustainable energy for all database
There are many reasons why this is a challenging exercise. There’s terrain, then there’s the minor aspect that most state-owned power distribution companies are deep in debt.
Despite this, and some scepticism about how these numbers are calculated, it’s an incredible achievement.
The flipside though is what kind of power is being created?
And that reveals a worrying trend.
Source : World Bank, Sustainable Energy for All Database
The story of India’s struggle to make solar and other forms of renewable energy work has been well-documented in past issues of this newsletter.
Source : India has some huge renewable energy goals. But can they be achieved?
That still hasn’t stopped India from setting ridiculous targets though.
People
In this section, I’m going to focus on something I’ve been guilty of not writing enough about—women.
Quite frankly, it was hard to find any metric here that was worth talking about where India has done well over the past few decades...except in the creation of people.
So, here’s the (admittedly basic) metric where India has really improved over the last few decades.
Source : WHO, UNICEF, UNFPA, World Bank Group, and the United Nations Population Division.
We shouldn’t even be talking about maternal mortality ratio—a metric which isn’t even discussed much in most developed (or even developing countries). India has some way to go, but it’s gotten better, and in a decade or so, it should reach where China and the US already are right now. But the World Health Organisation (WHO) seems effusive in their praise, and at this point, I’ll take it.
Scant as it is, that’s the good news.
The bad news is that women, for many reasons, don’t venture into the workforce.
Source : Derived using data from International Labour Organization, ILOSTAT database.
I’d explain more, but quite honestly, the best summary of this problem in India has been explained by Navneet Chahal, from Bain, in a LinkedIn post. The Ken linked to this in an earlier edition of our other newsletter, Beyond The First Order.
Land
The good news is really good news.
Over time, as the world is losing forest cover—an important aspect that helps keep global warming in check—India is going the other way around. It’s adding more forest cover. For a developing country, that’s quite astonishing.
Source : Food and Agriculture Organization, electronic files and web site.
The not-so-good news, quite frankly, is something that surprised me. For a significant part of my school, I remember being taught about the magical Green Revolution, which vastly increased crop yields in India and consequently reduced the number of famines. All of this is true, and I’m sure it’s a great achievement, but it pales in comparison to what happened globally.
This is a bit abstract, but it’s reasonable to assume that some countries do better than others because of a certain combination of resilience, resourcefulness and ambition that emerges through a combination of circumstances.
Depending on how you define this metric, India does spectacularly well on one definition, and scarily badly on another.
If you asked a random set of people on the street for the one metric where India beats every single country in the world, including the United States, China and Japan, chances are this isn’t the one that you’d expect to find. It’s the kind of stuff that should be on WhatsApp forwards, but isn’t.
It can be argued that the number of listed domestic companies is an indicator of the entrepreneurial power of a nation and its people. In that aspect, India beats some of the most advanced economies of the modern world.
But you probably know what’s coming next.
It’s not about the number of companies, but about the people themselves.
Of all the metrics in India, if you had to pick one, just one, to give you cause for concern, and that should give every single one of us sleepless nights, it’s this one.
Source : International Labour Organization, ILOSTAT database.
Enough has been written about the promise of the demographic dividend, but of late, more is being written about how the window of opportunity for India is running out.
I’ll end by quoting Vivek Kaul from his story in Mint
We have time till 2035 to cash in on our demographic dividend. We are more or less in 2020 now, and 2035 is just a little over a decade-and-a-half away. After that horizon year, India will start aging and the benefits of the dividend will start to fade.
Vivek Kaul, Demographic dream is collapsing rapidly, Live Mint
Until 2035, every year, on August 15th, keep this in mind. It's probably the most important metric for this country.
Happy Independence Day.
All illustrations for today's edition were done by Sharath Ravishankar and Anushka Chhikara.
Oh, by the way, just for August 15th, this edition of The Nutgraf is free and open to read on the website. Just use the link below, or the easy share buttons to tell everyone about it on LinkedIn, Twitter and WhatsApp. Tell them to sign up.
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Synthesis not analysis 
