INDIA’S GROWTH ON THE WORLD ECONOMIC MAP[/b]
With one billion + people stretched out across an enigmatic country that ranges from the snow capped mountains to vast deserts to lush river valleys to enormous cities, everything about India lies beyond simplification. But I am not here to talk about the geographical or demographical aspects of India. I will emphasize on the economic aspects of this ever-mystifying country called India.
India has been sarcastically termed as the population giant (India shares the kudos with China). India began its own economic reforms at a very late stage. India's reforms have been more measured, the effects less spectacular at first, but after nearly a decade, India too boasts of making a historical breakthrough. Analysts forecast that India's average income per person will double, and India's role in the world economy will rise radically. India has successfully ended aeons of self-imposed economic isolation and is all set to change the shape of the world Economy.
India is as enigmatic in economical perspectives as it is in geographical perspectives. India contributes some of the world's finest brains and MNC’s storm in to hire these bright individuals. So is it something to be proud about? Certainly not, because producing some of the finest brains is commendable but not providing them with opportunities to work for India is a unpardonable offence.
India's economy has improved its economic growth since the commencement of market-oriented reforms at the start of the 1990s. After decades of economic growth around 3.5% per year, of which 2% or more was eaten up by population growth, India is now enjoying economic growth of 6% per year, of which less than 2% is accounted by population growth. Analysts predict that with further reforms, growth could reach 9% per year, which would produce a rise of per capita income each year of around 7%, enough to double income per person in a decade.
Now let us rewind the movie called “Indian Economy”[/b] to a few decades back. When India achieved independence some 60 years back, Prime Minister Jawaharlal Nehru launched India on a customized. The state was to hold the economy's commanding heights through planning, large public investments, and ownership of important industrial sectors. As everywhere else where socialism was implemented, it was a certain invitation to disaster as states suffered from financial crisis and slow growth. This customized socialism came to an end in 1991. Ironically this was the same year Soviet socialism collapsed. In 1991, India began to dismantle state planning, allow for open international trade, and encourage competition among private industry. Since then, India's international trade has grown swiftly and overall economic growth has improved. The landmark achievement for India during this period of economic reform was to completely avoid the East Asian financial crisis of 1997-99.
However no matter how much Nehru is criticized for his leadership, he was the one who pioneered the science-based development. This science-based development began to bear fruit under a more liberalized economic environment. For forty years, India put in heavily in a series of leading science-based universities, especially the IITs. Many people had qualms about these investments. The question “Why, does a country of mass illiteracy need world-class science institutes, especially when a huge chunk of each graduating class emigrated to the US and other countries?[/b] However these people were proven wrong in the 1990s. The IIT graduates, working both in India and US became the vanguards of the information revolution. Indian engineers and entrepreneurs are one of the main fuels of Silicon's valley's growth; these associations helped to fertilize a world-class IT sector within India. IT-based exports from India, especially software from the IT centers of Southern India are by far the fastest growing exports of the Indian economy. This in turn has created stupendous economic opportunities for India.
India's demographic profile is changing in the right direction. India was long known in the world for its rapid population growth, high fertility, high infant mortality, and risk of famine. This surging population & its accompanying problems damaged India's economic development for a long time. There was no way to invest enough in education and health for each child. That tide is turning because of increased mothers' literacy, improved health care, and improved medical technologies, families are having fewer children, with much more education invested in each child. The outcome is that fertility rates have come down to below 3 per mother in much of India, and even below 2 in some parts of India. Population growth is slowing; average education per child is rising; and the population's average age is rising from very low levels, which itself contributes to a rise in income levels per person. These efforts would be even stronger with more government support for health and family planning.
The key for India is to strengthen what it has started: to further open the economy to market forces, and to intensify its efforts in investing in public health, education, science and technology. If these compelling forces of change can be strengthened, India will emerge, like China, into one of the world's economic leaders, and as a powerhouse of global economic development. And it will do it in great manner - proving that vibrant and open democracy can underpin economic development and social peace even in highly diverse, populous countries. India will not only become a model example but also open the roads of economic success for other countries in its league. For a long time India has been known for all the wrong reasons. Now it is high time that India is known for all the right reasons.
