Rising markets used to be a symbol of hope in the world economy. The economy of China is slowing and Brazil is stuck with stagflation. Russia is under recession, South Africa is overwhelmed by corruption and inefficiency. Amid all these disappointment one emerging economy stands out: India. India could become the world economy’s high-flyer—but it must drop the bequest of counter-productive measures. Today India needs something equal to the 1991 landmark budget which opened the economy to foreign capital, trade and competition.
Indians possess entrepreneurial quality and half of the population is under 25 years old. So India has scope for catch-up the remarkable growth. In 2013 GDP per person (at purchasing-power parity) was $5,500 in 2013, compared with $15,000 in Brazil and $11,900 in China. However Indian economy has the potential to become most promising economy in the world. Scholars point out that GDP of Indian economy grew by 7.5% year on year. The prospect for more reforms in the strategies of Indian economy is the real reason for hope.
If India is to thrive for a better economy, it needs political courage and bold reforms. One of the promising development strategies is to move people from farm jobs to more productive job with better pay. China’s economy was built on export-led industries. So the scope to follow China’s model is limited.
Manufacturing industries are becoming less labour-oriented as a result of technology. Yet India could manage its economy better than it does now. India has a world-class IT industry and the country’s best hope is an economy with mixed approach, growing participation in global markets in both services and industry. To achieve this success, we must focus on three inputs: land, labour and power. Another important area ripe for reform is India’s national and state labour laws.
Further posts will provide more details of different aspects of Indian Economy.