India : Emerging Economic Power

Key points
The demography of our country is opposite that of Japan and the European nations. Fifty per cent of India's population is less than 25 years of age. There is a large domestic demand because of the huge population. We are less dependent on exports for our growth. For the 1st time in the history of country population has increased at diminishing rate , add less people than from last decade. We are the 4th largest economy by ppp.

 "The biggest change the last decade witnessed was that the world at large recognised that India can deliver technologically superior products, competitively. Indian expertise in IT, pharma and heavy engineering has been accepted globally. Trade in goods and services as a proportion of the GDP has risen from below 20 percent in 1990-91 to more than 50 percent today

Foreign investment has risen from negligible levels to more than $60 billion per year. Indian companies have gone on to acquire multi-billion dollars worth of companies in the United States and elsewhere in the world.

Investment as a proportion of the GDP has risen from low 20 percent to nearly 35 percent. The biggest revolution has, of course, been that in the telecommunications sector. From just 5 million telephones in 1990-91, India boasts of 750 million telephones today Indian people has most positive opinion about there economy and its growth path than almost all Eu and Latin american countries And Usa.

 During the last eight years, India has grown between 8 and 9 percent after factoring our inflation. But this is the growth measured in terms of the real rupee, the domestic currency. Taking into account the increase in the value of the rupee against the dollar in real terms, it turns out that the growth rate in India in real dollar has been a phenomenal 13 percent in the last eight years. Given the countrys high savings rate, a dynamic entrepreneurial class, increasingly young population and exposure to the worlds most competitive and innovative suppliers , prospects for sustaining this growth over the next fifteen years are excellent.

Challenges
India faces one key challenge: the movement of people out of low-productivity and low-income agriculture into non-agricultural activities has been extremely slow. More than 50 percent of the workforce is still in agriculture. Thus, a very large population now relies on income from a very small part of the GDP and it is the part of the economy that rarely grows more than 4 percent per year on a sustained basis. The industries that have grown rapidly such as automobile, two-wheelers, engineering goods, petroleum refining, telecommunications, software, finance and pharmaceuticals are either capital- or skilled-labor intensive. Labor-intensive industries such as apparel, footwear, light consumer goods and various processing activities have simply not done well in India.

 Massive investment is needed in Infrastructure, Education, Power , Roads network. Red tapism , corruption is yet another hurdle to robust growth. In Human Development index India stood at 126 in 177 countries Life expectancy rate is 63.8 less than Indonesia and Srilanka If reforms are undertaken, there is little doubt that India can accelerate its growth by another 3 to 4 percentage points. On one hand, this will help the country make poverty history at a faster pace and on the other it will facilitate more rapid ascendancy to the status of a genuine global power.

Thank you!