INDIA The Challenges Ahead

India’s per capita income has doubled over the past 20 years. With population growth slowing now to about 1.6 per cent per annum, a growth rate of the gross domestic product (GDP) of around 9 per cent per annum would be sufficient to quadruple the per capita income by 2020.

Opinions on achievable rates of economic growth have a tendency to swing along with the short-term economic performances. Two years ago, the global boom, the IT revolution and the allround optimism led many to believe that in the coming decade India could mimic the 9-10 per cent growth rates that China achieved over a twenty year period. Such optimism is out of fashion today.

But there is ample evidence showing that if we can adopt a longer term perspective that is not blinded by immediate circumstances and fluctuating moods, higher rates of growth should be achievable for India in the coming years. This is not a prediction—it is a potential. The reality will depend on how effectively we seize the opportunity to do so.

From a historical perspective, global rates of development have been increasing for more than a century. The dramatic rise of Japan and the East Asian tigers, and most recently China, are illustrative of this point. An objective assessment reveals that all the major engines of economic growth that have accelerated growth up till now, will be present in greater abundance in the coming years than they had been in the past.

A vision is a statement of aspirations and intentions, and therefore, it is essential that we fully recognize the need for determined effort to transform all these potentials into realities. Ultimately, it is not our capacity for prediction but our action that will determine the outcome. That action needs to be based on proper appreciation of the forces available for accelerating our progress.

Assuming that India achieves this quadrupling of per capita income by 2020, it would attain a level of development far higher than where China is today, and on par with upper-middle income countries (UMI) such as Argentina, Chile, Hungary, Malaysia, Mexico and South Africa. One day India will rise higher still, and having achieved such a target, will know HOW she achieved it. But such knowledge could be acquired even now from the experiences of the many nations that have already passed through these stages of development. From their experiences India should endeavor to acquire the underlying principles and theoretical knowledge that can then be applied appropriately to our own specific case. Therefore, we refer to the average performance of this group of UMI countries as a benchmark for our development challenges and achievable goals by 2020.

Following Table compares India’s current status on some key parameters of development with the average level achieved by a group of UMI countries. It may be noted that we are not holding up the UMI countries as the goal for India in 2020, but merely using them as a reference point to indicate the magnitude of progress India needs to make in different fields. Our vision is not only to reach these reference levels but to surpass them in many cases.

Developmental Parameters at a Glance

India Present vs. UMI Reference for India 2020

Developmental Parameters India UMI Reference Present for India 2020

Major Challenges for India

• A targeted approach to bring millions of families above the poverty line.

• Generation of nearly ten millions of new employment opportunities per annum, especially for those in the lower income groups.

Eradication of illiteracy.

• A concerted effort to raise primary and secondary enrolment rates and minimize dropouts.

• Improved public health to reduce infant mortality and child malnutrition.

• Massive investment in power generation, telecommunications and other physical and social infrastructure.

• Accelerated acquisition of technology capabilities to raise productivity in agriculture,

Industry and services.

• Becoming a more important player in the world economy in terms of both trade and

Investments.

We are confident that we can and will meet these challenges. We also feel that we have the knowledge and the capacity as a nation to achieve food for all, health for all, and jobs for all. What we do not know for sure however is, how long it will take us to accomplish them. We need, therefore, to affirm the will and the determination to do it rapidly and achieve it now rather than sometime later.