Indian Century or Asia’s- India is a Major Player
Posted : January 23, 2005 at 6:17 pm [IST]
“Will it be India’s century?” has been the most read of the entries. And then comes CIA-commissioned report titled “Mapping the Global Future”.
It was interesting to know that USA is concerned about the role of Asian giants. It was apparent from the coverage of the CIA-commissioned report titled “Mapping the Global Future” in media. The report is the third in a series of five-yearly forecasts of global trends published by the National Intelligence Council, a group of senior intelligence analysts who report to the CIA director. The report is about India 2020. The forecasts for 2020 were based on consultations with more than 1,000 non-government experts at 30 conferences on five continents over the past year. The report predicts the heralding of an Asian Century in place of a receding American Century.
“Barring an abrupt reversal of the process of globalization or any major upheavals in these countries, the rise of these new powers (China and India) is a virtual certainty.”
“While most forecasts indicate that by 2020 China’s gross national product (GNP) will exceed that of individual Western economic powers except US India’s GNP will have overtaken or be on the threshold of overtaking European economies.”
Let it be Asian Century. India is to play a significant role.
Remarkably, the BRIC report of Goldman Sachs also predicted the same. Roopa Purushothaman writes in Business Today’s 13th Anniversary issue in her article- ‘The BRICs Dream’:
“While investors and corporations have focused intensively on China, India could potentially be a bigger growth story over the long run. Under our projections:
” India is the only BRICs economy that will sustain an above 5 per cent growth throughout the next 45 years. Over the next 15 years, India’s GDP growth averages 6 per cent;
” It is the only BRICs country whose population will continue to grow throughout the entire period. Its population growth rate will remain above the rest of the BRICs, while its share of the working-age population in total population will rise through 2020 (this dynamic sees a decline in the rest of the BRICs and the g-6 over the same time frame). India’s population will overtake that of China in 2034;
” Income per capita triples by 2020. By 2050, income per head increases by 35 times current levels.”
.However, the country must take care of the pitfalls that form the part of their predictions
CIA-commissioned report lists the pitfalls as follows:
” India and China have their own rivalry that lurks just beneath the surface and can become an impediment.
” The rise of India in particular may also be resented by other declining western powers and those left behind in the developing world, particularly countries like Pakistan.
” With no population control in place, India will face stark choices as its population increases and its surface and ground water become even more polluted. There is also the growing problem of malnutrition and other health hazards such as Aids.
” The regional disparity may grow serious. Much of the west and south may have a large middle class by 2020, but Bihar, Uttar Pradesh, and Orissa may remain underdeveloped. Surprisingly, the report doesn’t consider widening income and regional disparities in India to be seriously incompatible with a growing middle class and increasing overall wealth. As per the estimate, there are now some 300 million middle class making $2,000-$4,000 a year.
” The legacy of a stifling bureaucracy still remains a big concern in India.. The country is not yet attractive for foreign investment and faces strong political challenges as it continues down the path of economic reform. A much larger population in number remains in desperate poverty.
” Communal tensions and its political exploitation, growth of regional and caste-based political parties must be taken care of by the society as well as the government.
BRIC report does also talks of certain essentials for the kind of sustained higher productivity growth that has eluded India in the past:
India must maintain steady progress in strengthening the conditions for growth- openness to trade and investment, sound macro-economic policies, strong institutions and infrastructure (physical, logistical, service and health), and high education levels.
If India can match China in the quality of its infrastructure and education, growth rates over the next five years could jump from an average of 6.1 per cent to 8.1 per cent. Why is it so difficult?
It was again heartening to read Arvind Virmani’s article “India a giant economy? Yes, by 2035″. http://in.rediff.com/money/2005/jan/21guest.htm Arvind provides the time frame.
The global economy will change from a uni-polar (USA) to a bi-polar (USA and China) one with the emergence of China. This will be followed a decade and a half later by the emergence of India, converting the world economy into a tri-polar one. In 2002, India, is a little over one-quarter the size of the US economy. Before the end of the current decade, India’s economy will become larger than that of Japan, thus taking it to the third place, behind the US and China.
As the share of the US in world GDP falls (from 21 per cent to 18 per cent) and that of India rises (from 6 per cent to 11 per cent in 2025), the latter emerges as the third pole in the global economy. By 2025 the Indian economy is projected to be about 60 per cent the size of the US economy. The transformation into a tri-polar economy will be complete by 2035, with the Indian economy only a little smaller than the US economy but larger than that of Western Europe.
The country’s focus on the rural sector will be another interesting initiative to watch. It is essential to continue momentum to set the stage for sustained growth.
Will India go ahead and grab its position? Its potential is known. It came from its emergence as IT power and the success of Indians in USA. Technocrats from IITs and other institutions laid the foundation. Various sectors require only facilitation from the government through its non-obstructive policies.
India and all Indians must participate in this yagya that requires innovations and sacrifices of hard work.
- Indra
Category: Industry/Management |
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