Economy - Welfare

India, Pakistan and Bangladesh have come a long way since the British left them. Of the three nations, India has seen by far the most dramatic growth. In terms of economic resources, India did much better than Pakistan out of partition. It inherited 90% of the subcontinent's industry and the thriving cities of Delhi, Bombay (now Mumbai) and Calcutta. It is now one of the world's fastest developing economies with average growth rates of 8% over the past three years. It is also emerging as a serious global player in information technology, telecommunications and pharmaceuticals.

By contrast, Pakistan's economy which was based on agriculture and controlled by feudal elites, was left with 17.5% of the British colonial government's financial reserves after partition. Nevertheless, it has seen sustained growth since the early 1950s despite internal strife, conflict with India, US sanctions, global recession and, more recently, the 2005 earthquake. The economy really took off in 2000 after reforms that saw public sector enterprises privatised, relaxation of regulations on external trade and reform of the banking sector. Thanks to economic growth and foreign investment, all three states have seen expansion and improvement of health and education services. Life expectancy has increased, infant and maternal death rates have dropped, and literacy rates risen.

But poverty is still widespread in all three nations, which feature in the top 10 most populous in the world. Almost half the population in Bangladesh lives on less than $1 a day and Pakistan's social indicators still lag behind countries with comparable per capita incomes. A substantial number of people living in India's villages remain illiterate and impoverished, raising concerns about the inclusivity of the economic boom.

Powerful regional and caste-based parties have empowered many poor people whose progress was hampered by the ancient Hindu caste system, but that system still impedes widespread social progress.