India's Next 10 Years

[gubbi]

India's Next 10 Years
Letter from the Editor: The concept of inclusive growth suggests that the benefits of development must touch all our states in ample measure
by Indrajit Gupta | Mar 4, 2010

There was considerable hoopla when the Indian economy crossed the trillion dollar mark for the first time three years ago. Over the next 10 to 15 years, it is now almost inevitable that our economy will touch $3 trillion. Last week, I had an interesting chat with K.V. Kamath, ICICI Bank’s non-executive chairman, about the implications of such phenomenal growth. Perhaps with the exception of China, nowhere in the world has one seen such a large mass of people go through a period of unprecedented growth. Even though China’s march began in 1978, the real boom in that economy started in 2000 and lasted for more than 10 years. During this period, per capita incomes have trebled there.

On the other hand, India began its charge in 1991. And by 2025, per capita incomes are likely to move up three fold from the current base of about $1,000. Yet Kamath raised a significant question: How much do we really know what happens to a society that goes through such rapid change? China could have offered some clues, but no one is sure whether this transformation has been credibly recorded there. Now, when India steps up for her moment in history, it’ll perhaps offer a once-in-a-lifetime opportunity for researchers and media to chronicle this massive surge.

Set against the backdrop of last week’s Union Budget, that’s exactly what this special edition attempts to do. Associate Editor Dinesh Narayanan and Principal Correspondent Udit Misra lay out the big challenges facing the country over the next decade. Their essay picks up clues from the Budget speech and then focusses our attention on four hot-button issues that will keep our policy-makers awake at night.

We then pick up the four big bets that this government has made — education, homeland security, climate change and roads — and look at how each minister in charge is using a new approach to drive his agenda.

Finally, the concept of inclusive growth suggests that the benefits of development must touch all our states in ample measure. Yet in states like Bihar and Uttar Pradesh, the human development indices are almost as bad as that of African countries. So why can’t we learn to replicate the success in one state in another? We’ve picked out two important stories of transformation that offer critical lessons. Associate Editor Malini Goyal’s family quit Bihar more than a decade ago. Quietly but surely, under Chief Minister Nitish Kumar, Bihar has undergone a huge upheaval for the past four years. Malini returns to her home state to discover why good governance can make a difference even in a seemingly hopeless situation. Make sure you read her personal account on page 68.

The agricultural crisis has tormented the minds of policymakers and farmers alike. Some weeks ago, we found the answers in unexpected quarters: The state of Gujarat. In the last few years, Gujarat’s agrarian sector has grown at three times the national average. Consulting Editor R.N. Bhaskar travels to the hotspot to bring you an amazing story of agricultural revival. It underscores my belief that we don’t need new solutions. All we need is political will and foresight.

Interesting read. Anyone who wants to read more can follow up with this article on the Forbes India website.

 

[Avatar]

More than these articles, we will let our actions speak. Instead of talking, we will make it happen.

"At the close of this century, the world would be dominated by the West, but that in the 21st century, India will conquer her conquerors." ~ Dr. Arnold J. Toynbee (1889-1975) British Historian

 

[jha]

how about hearing directly from horse's mouth...

development has happened for sure in bihar..yet it is so less... i mean , roads are there now but what about electricity and health care..? too much to do and yet no special package from center..we get flooded for 5 months in an year yet no relief, no taking up the matter with nepal and solving it..

sitting in delhi and lecturing about bihar and saying it is progressing is just an eyewash..situation is better now from that in 2004 but untill and unless some special package is announce bihar will be same..

 

[RiazHaq]

Improved governance in Bihar is apparently helping boost economic growth and showing signs of the beginning of infrastructure construction. But it is not yet inclusive. It must translate into improved social indicators by making progress more inclusive. This is a challenge not just for Bihar, but for India as whole.

Haq's Musings: Challenges of Indian Democracy

Haq's Musings: Is Indian Democracy Overrated?

 

[gubbi]

how about hearing directly from horse's mouth...

development has happened for sure in bihar..yet it is so less... i mean , roads are there now but what about electricity and health care..? too much to do and yet no special package from center..we get flooded for 5 months in an year yet no relief, no taking up the matter with nepal and solving it..

sitting in delhi and lecturing about bihar and saying it is progressing is just an eyewash..situation is better now from that in 2004 but untill and unless some special package is announce bihar will be same..

It is indeed acknowledged in the article about the dismal state of Human development indices in Bihar in UP. But what teh author points out is the view of an ex-resident of the state about how good governance, which you yourself have mentioned, makes a lot of difference.

You cannot build Rome in a day, so given that good governance continues, we hope to see a sea change in backward states. Its up to us to elect capable leaders who will make that sea change a reality.

 

[Jade]

Improved governance in Bihar is apparently helping boost economic growth and showing signs of the beginning of infrastructure construction. But it is not yet inclusive. It must translate into improved social indicators by making progress more inclusive. This is a challenge not just for Bihar, but for India as whole.

Haq's Musings: Challenges of Indian Democracy

Haq's Musings: Is Indian Democracy Overrated?

Some people are excluded from the development because of the difference due to various factors, some effecting the society as a whole, whereas some specific. Unless the society tries to accommodate or the address the differences, inclusive growth is a distant dream. Only sustained rapid growth rate, decentralization of political power and improved delivery of public services can remove the barriers that exclude the unfortunate. India is a democracy and like all democracies Indian has its share of flaws. But, fortunately the GOI has taken the mantra of inclusive growth on war scale. Some steps being taken by the GOI such as huge investment in rural infrastructure, improving agricultural technology, revamping labor regulations, empowering the poor through inclusive politics, decentralizing of power to local bodies, and creating more low and semiskilled jobs in the rural area would go a long way in making the Indian system more inclusive. The recent budget and the bill to reserve 33% of legislative seats to women are right steps

 

[deckingraj]

Some people are excluded from the development because of the difference due to various factors, some effecting the society as a whole, whereas some specific. Unless the society tries to accommodate or the address the differences, inclusive growth is a distant dream. Only sustained rapid growth rate, decentralization of political power and improved delivery of public services can remove the barriers that exclude the unfortunate. India is a democracy and like all democracies Indian has its share of flaws. But, fortunately the GOI has taken the mantra of inclusive growth on war scale. Some steps being taken by the GOI such as huge investment in rural infrastructure, improving agricultural technology, revamping labor regulations, empowering the poor through inclusive politics, decentralizing of power to local bodies, and creating more low and semiskilled jobs in the rural area would go a long way in making the Indian system more inclusive. The recent budget and the bill to reserve 33% of legislative seats to women are right steps

well these are good steps taken by GOI that you have mentioned, however the fact of the matter is that we were never short of good schemes that can achieve inclusive growth if and a BIG IF they are implemented....Many leaders including our PM from Rajiv Gandhi to Manmohan Singh and the charismatic(usual term that media associates with this man) Rahul Gnadhi has said at various levels that only 10% of the aid/schemes that are directed for the upliftment of poors indeed reach them...years after years..budget after budget all we hear is new schemes and such comments by our leaders..however the most frustrating part is that no one can come up with a solution of how to ensure benefits reach those people who needs it...Unless and Until we achieve that Inclusive Growth will remain not only a distant dream but a dream that can never be fulfilled....

 

[Jade]

well these are good steps taken by GOI that you have mentioned, however the fact of the matter is that we were never short of good schemes that can achieve inclusive growth if and a BIG IF they are implemented....Many leaders including our PM from Rajiv Gandhi to Manmohan Singh and the charismatic(usual term that media associates with this man) Rahul Gnadhi has said at various levels that only 10% of the aid/schemes that are directed for the upliftment of poors indeed reach them...years after years..budget after budget all we hear is new schemes and such comments by our leaders..however the most frustrating part is that no one can come up with a solution of how to ensure benefits reach those people who needs it...Unless and Until we achieve that Inclusive Growth will remain not only a distant dream but a dream that can never be fulfilled....

Yes, I agree with you but things are fast changing. The quest to become a regional power, competition with China, and more importantly facing an enlightened voter(Bihar electing Nitish is a prime example) are forcing the policy makers towards the path of inclusive growth. Inclusive growth is not any more about poverty alleviation and empowerment, but is about winning elections.

Please refer to the link below for further information
Forbes India - UPA's Inclusive Growth Agenda For India

 

[TechLahore]

India's Next 10 Years
Letter from the Editor: The concept of inclusive growth suggests that the benefits of development must touch all our states in ample measure
by Indrajit Gupta | Mar 4, 2010


Interesting read. Anyone who wants to read more can follow up with this article on the Forbes India website.

Certainly interesting. Couple of minor points:

1. India's GDP will touch $3T in the next 10+ years if growth continues at an average of 8% for 10 years. Possible, but by no means a slam dunk given all the other national and global variables.

2. An increase from the current 1.2T to 3T does not mean a trebling of per capita income as suggested. In this time period (10 years), India's population will grow by another 20% (Just this 20% is almost 1.5 times Pakistan's population). This means that IF the 8% growth continues for 10 years, even then per capita income will be around $2,500 by 2020.

In comparing two countries of roughly the same population size, China and India, one finds that China's current per capita income of $3,600 will be up to about $8,522 under the same assumptions (i.e. China continues it's 9% growth) by 2020, therefore the gap will actually be wider then as compared to what it is now.

 

[deckingraj]

Yes, I agree with you but things are fast changing. The quest to become a regional power, competition with China, and more importantly facing an enlightened voter(Bihar electing Nitish is a prime example) are forcing the policy makers towards the path of inclusive growth. Inclusive growth is not any more about poverty alleviation and empowerment, but is about winning elections.

Please refer to the link below for further information
Forbes India - UPA's Inclusive Growth Agenda For India

Thanks for sharing the link...However you missed my point...I am not saying that GOI do not want to have inclusive growth or party's are ignoring the fact that people now wants results...Nitish is defnitely a good example...however the best example would BJP loss in 2003 elections when people rejected India shining slogan....Anyways what i am trying to say is that we hear schemes after schemes but none of the leader/policy maker talks about how will they ensure that fruits of these schemes are enjoyed by those for whome they are intended for???

Look at the budget for current fiscal year presented by Pranab Babu...So much investment in schemes like NREGA and much more but how on this earth would you ensure poor gets benefitted if you don't change the existing system which is corrupt....Just to give you an example...There have been so much fuss about Farmers commiting suicide across the country...GOI stepped in and waived humungous loan amounts yet this menace of Farmers commiting suicide is not being tapped...Why??? because the system which is largely responsible for poor plight of farmers is still in tact...There are still touts in between govt and Farmers who buy at cheap rates and sell at high prices thereby denying a farmer true cost of his/her crops...sub-standard and sometimes no storage place is still an issue(same issue that my Father used to right in essay writing competitions during his school times) thereby leading to lot of wastage and price rise and what not....I know things are changing but the real need of the hour is more policies to change the existing corrupt and pathetic system than new schemes to arrange funds for poor...

 

[deckingraj]

Very good observations...However couple of corrections...

Certainly interesting. Couple of minor points:

1. India's GDP will touch $3T in the next 10+ years if growth continues at an average of 8% for 10 years. Possible, but by no means a slam dunk given all the other national and global variables.

What you mean??? Favourable or no Favourable conditions it is not a joke to to have an average growth rate of 8% for a decade...Apart from China not many developing countries have achieved this feet...Its an uphill task though i am sure we will achieve it...If you go by our PM statement then with in 2 years we will be back to 9% growth....

2. An increase from the current 1.2T to 3T does not mean a trebling of per capita income as suggested. In this time period (10 years), India's population will grow by another 20% (Just this 20% is almost 1.5 times Pakistan's population). This means that IF the 8% growth continues for 10 years, even then per capita income will be around $2,500 by 2020.

Still a giant step from a meagre 38084 INR($827) in 2009. Almost 3 times....827*3=$2481

In comparing two countries of roughly the same population size, China and India, one finds that China's current per capita income of $3,600 will be up to about $8,522 under the same assumptions (i.e. China continues it's 9% growth) by 2020, therefore the gap will actually be wider then as compared to what it is now.

Yes you are right the Gap will increase for next decade...However if you go by same projections this gap will start decreasing after 2025 and eventually table will reverse by 2050....Anyways thats not related to topic...and honestly i don't give two hoots to whether India will surpass China or not...I am happy as long as we are growing at the rates that have been projected. Moreover China's economic boom started a decade before ours and they are enjoying the fruits of their hardwork now.....Not that i am using this as an excuse because it was foresightedness of chinese leaders and short sightedness of ours that resulted in this delay yet with gods grace and shear hardwork we will also enjoy the fruits of economic boom...GO INDIA GO

 

[below_freezing]

congrats india. best wishes from us in china. remember, industrialization is a painful and slow process only a few select countries will complete. the challenges ahead will be numerous. i hope that increased economic power in india does not translate into greater ambition for military expansion ahead.

 

[thebrownguy]

We seem to be on right track in services and IT especially.Of late our production Industry has witnessed a great revival, and production does seem to be our Priority in the coming years.
However, we must not neglect agriculture on which a large percentage of our population depends. We must modernize our agriculture. A poor performance from the sector has been due to extremely poor distribution infrastructure. Basic needs like cold storage facilities are very sparse and have been neglected by the Government in the past.
The R&D will play a major role in the sector and is the call of the hour.
We as an economy need to realize that agriculture is an equally important pillar as are services and production.

 

[Jade]

Thanks for sharing the link...However you missed my point...I am not saying that GOI do not want to have inclusive growth or party's are ignoring the fact that people now wants results...Nitish is defnitely a good example...however the best example would BJP loss in 2003 elections when people rejected India shining slogan....Anyways what i am trying to say is that we hear schemes after schemes but none of the leader/policy maker talks about how will they ensure that fruits of these schemes are enjoyed by those for whome they are intended for???

Look at the budget for current fiscal year presented by Pranab Babu...So much investment in schemes like NREGA and much more but how on this earth would you ensure poor gets benefitted if you don't change the existing system which is corrupt....Just to give you an example...There have been so much fuss about Farmers commiting suicide across the country...GOI stepped in and waived humungous loan amounts yet this menace of Farmers commiting suicide is not being tapped...Why??? because the system which is largely responsible for poor plight of farmers is still in tact...There are still touts in between govt and Farmers who buy at cheap rates and sell at high prices thereby denying a farmer true cost of his/her crops...sub-standard and sometimes no storage place is still an issue(same issue that my Father used to right in essay writing competitions during his school times) thereby leading to lot of wastage and price rise and what not....I know things are changing but the real need of the hour is more policies to change the existing corrupt and pathetic system than new schemes to arrange funds for poor...

India is large and complex society. Even in these days the government is not that visible in some parts of rural India. And, unfortunately, at least in India, things take time to change. Even, today the system is not that efficient to deliver the goods to the poor. Public funds are channeled in such ways that it is least capable of delivering the goods to the masses. Over it, corruption and inefficiency collude to aggravate the situation .The need of the day is nudge India’s economic policy for better inclusive growth. That is the reason why I was saying that the present budget could be a watershed event. The budget is fairly partial towards the poor. But the question is who is poor and unfortunate and Unique Identity System(UIS) could be a solution to this.

However, much more things should be done by the government should it wants to bring more masses into the growth fold. Some of the measures could be 1) empowering the local bodies 2) increasing the political representation of the unfortunate 3) connecting the poor directly to the markets (disintermediation) 4) establishing efficient rural supply chains and logistics 5) better and flexible loan facilities to the poor 6) better access to technology 7) better health facilities and education

I totally agree with you that things are changing in some areas and things are not so changing in some areas, but I am happy that at least the government has the resolve to make the inclusive growth the corner stone of the governance and this could be the first major step towards the goal

Regarding BJP loss, elections are very complex and involve multiple factors and in societies such as India the complexity increases manifold. However, in my personal opinion the “India shining” was not an apt slogan in 2002.

 

[deckingraj]

^^^^^^

Agreed....There is a saying something is better than nothing....UIN is definitely a good idea and they also have got a right person to deliver the job...This will surely help in ensuring aid reaches the deserved person...However this task(UIN) is very complex and hope it don't end up as a faliure like Ration Cards...Voter-I-Cards etc...