Swati Dhingra is an Associate Professor in Economics at the London School of Economics, and an Associate of the Centre for Economic Performance at LSE. From August 2022, she will be serving as an External Member of the Monetary Policy Committee of the Bank of England.
Professor Dhingra spoke to Asian Voice about the perception of the Indian economy over 74 years and the role of British Indians in the UK.
How do you think India's perception as an economy has evolved over 75 years of Independence?
India has come a long way economically in these 75 years. About half of the population lived below the $1.90 poverty line in the early decades after independence. This number is now estimated to be about 10 per cent. Social and economic reforms have made significant contributions to this, and it has ensured India’s place among the top twenty economies in the world.
But India is still behind other G20 nations in terms of its social safety nets and the experience with the pandemic highlighted the fragility of this system. Addressing the gaps in health, education and work can unleash huge growth potential and fulfil the aspirations of a young population.
How significant is the role of British Indians in contributing to the economy of the UK?
I think the integration of the Indian diaspora in the UK is exceptional, and this is reflected in the deep foreign investment ties between the two countries. British Indians have made an immense contribution to these ties through their participation in the domestic economy and by enabling the UK to punch above its weight in the global economy.
While the middle class always bears the more significant brunt of an economic crisis, how would you dissect the current economic policies and decisions the UK took during the pandemic? What could have been done better?
The UK was a pioneer in terms of supporting workers through the height of the pandemic, something which India could have also learned from the UK about. In India, there was some protection offered at the very bottom end of the income distribution through existing poverty alleviation programmes. But there was a substantial share of working people who fell into poverty as a result of the pandemic and the lack of social assistance.
Now new data in the UK is showing that half a million people have dropped out of work completely and health reasons are part of that story. This hasn’t happened to the same degree in some European countries. Add to this the learning losses that have occurred among children and the youth, and the costs of the pandemic on potential economic growth start to mount. For both UK and India, these setbacks need unwinding.
