India is an economic super power?

India is an economic super power?
(Anup Kumar Srivastava*)

Overview:

India is the world’s most populous democracy and a member of the G20, raising expectations of the country’s aspirations for its global profile. India's population will be slightly fewer than 1.3 billion, of nearly 16.5 percent of the world's population, not far behind China's.

India as a global player and rising economic power, the high level of growth in the country is helped in the international economy recover from the crippling effects of recent financial turmoil and recover from the global economy crisis. Having witnessed a slowdown in growth in the wake of the global financial crisis, India’s growth rate picked up to 7.4 per cent in 2009-10 from 6.7 per cent a year ago. The economy expanded by 8.9 per cent in the first half of the current fiscal, making India one of the fastest growing economies in the world. According to the International Monetary Fund’s projections, the Indian economy is expected to record a growth rate of 8.8 per cent in 2010-11. As well as Prime Minister of India forecast to growth rate of 9 to10 per cent in current year.

India was moving towards becoming a global economic power and significant level of foreign investment was the most efficient way to achieve this objective. India offered great opportunities particularly in two sectors - infrastructure and outsourcing and added that investment in social and physical infrastructure in the country will create jobs and growth in investors own countries.

Corporate sector:

India is expanding its influence differently – in a corporate way, using brands, which will generate global power, but more slowly. There was agreement that India could not become a superpower without resolving its internal dispute like maoist, corruptions’, terrorism, unemployment and others disputes including border areas of Asia pacific regions. The private sector needs to understand that they are now expected by society to play a role that goes beyond the role for which their business was created. They have a transformational role to play.

The educational system in India has produced a significant number of CA, Doctors, MBAs, lawyers, researcher, analysts and other professionals, many of whom will work in India for much less than their professional counterparts in the U.S. and Europe.

India's emergence as a global economic power is something that offers challenges and opportunities to MNC. For the foreseeable future, the relatively cheap skilled labor in India offers companies the option to outsource certain functions there to reduce the cost of operations and remain competitive in the global economy.

Public-private partnerships:

Public-private partnerships have the potential to drive growth, particularly in the agricultural sector, but government’s role should be limited. Government needs to create a healthy environment for entrepreneurship, but should not be restrictive. I believe in the power of entrepreneurship and in giving people economic freedom. A series of innovative public-private partnerships in rural development are being rolled out across the country and 250,000 villages will be connected to broadband by 2012. If we keep moving forward, we can create stable livelihoods in rural areas.
Banking sector:

India has modernized its banking regulations. India has liberalized its laws to allow foreign banks to take over branches. Local Indian private banks are allowed to set up foreign bank branches. The banking rules have been liberalized considerably.

India has come out of the worldwide economic meltdown relatively unscathed, and is enjoying a high rate of economic growth. It will also have a highly favourable dependency ratio – the proportion of those in the workforce to those dependent on it.

It is crucial to foster innovation and impart education and employable skills. In addition to education and training, healthcare is essential for an employable workforce. Also, the Indian rupee will rise in the long term. To control inflation over the medium to long term, India must fix supply-side issues such as the infrastructure deficit.

People’s perspective:

The country’s status as a rising economic power is closely connected with how it manages this next phase of growth, balancing rapid development with the environment and most importantly, the need to ensure all people have opportunity.

People’s incomes are going down, which is what we have to think about when we talk about innovation. We have to look at the numbers and quality of life. [Millions] are living on less than one-half a dollar per day. We do not have inclusive growth in India, which means we do not have sustainable growth.

Although India has seen as a rising economic power and it is hoped that a trickle down will benefit the poor and marginalized; in reality the gap between the rich and the poor is growing. The National Commission for Enterprises in Unorganised Sector (NCEUS) 77% population is poor and 80% of SC & 90% of ST are poor in rural areas reported in 2010. Over half the children in India are malnourished and about one-quarter are so severely malnourished that they have shrunken brains and stunted bodies. A new generation of millions of Indians will grow to adulthood disabled. More than half of all women are anemic with pregnant and lactating women suffering severe anemia and malnutrition.

This situation is intolerable because India is a surplus producer of grain. This grain however, is often exported or sold on the open market. But the poor cannot afford to buy cheapest food grain at market rates hence it is imperative that the hence economic growth rate can not be link to poverty and improvement of poor community life, So that must be strengthened to local community skill development for sustainable economic growth and India is survive to economic super power.

(*Author is budget and financial analyst), Delhi.)