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India Shining: this time with Aplomb!

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Post subprime crisis, back in 2008-09 there were all praises for India having a conservationist policies & not letting any of its bank & financial institution succumb amidst the crisis situation. Indian government, public & private companies have constantly tried to attain stability since then.

Come 2010, the acknowledgement continues & results are visible, the confidence on this emerging nation is seen in continuous appreciation of rupee which today stands at Rs.44.50 against dollar; Reserves stand close to 300 billion dollars; Investments by foreign institutional investors in the domestic equity market which have crossed the $20-billion mark this calendar year (The previous record was $17.7 billion in 2007, just before the US sub-prime-led financial crisis hit economies all over) & the net investment in the debt market has already crossed $10 billion. This is the highest ever FII inflow into the country.

Sensex crossed the much awaited 20000 mark. Exports have been advancing (though trade deficit of 13.06 billion dollars is also observed). The icing on the cake is that seventeen new billionaires joined the Forbes India’s Rich List this year, as Mr Mukesh Ambani topped the list for the third year on a row with the country recording 69 billionaires this year, from last year’s 52.

India-Rich-List-2010

The country’s top 100 rich people had a combined net worth of $300 billion more than the combined GDPs of all the other nations in South Asia put together.

And then how the infamous Common Wealth Games should not get mention here, the prelude to CWG was applauded by all (it’s said well begun is half done) and India has continued to make good impression by garnering gold to retain its position at No.2 and the Indian hockey team qualifying for finals beating England.

The ceremony of course arrived as a breather after continuous tidings about not very conducive environment like horrible toilets, stagnant puddles, falling ceiling, a terrorist attack on JamaMasjid, Attacks on foreign visitors etc. Though it seemed India was not prepared, so far India has put up a good show.

The Good…

Indian economy is expected to expand by 8.5% this year and IMF has pegged it at 9.7%. (However it has a long way to go before it is as rich as China).

This is just the beginning. Make way people….. “India has arrived”.

The magic wand is India’s people power. I think India is soon going to replace Japan & may be outpace china in few years to come. Here is an amazing fact India’s working-age population will increase by 136m by 2020; China’s will grow by a mere 23 m.

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India’s demographic dividend is soon going to reap rich benefits. China’s workforce will shortly start ageing; in a few years’ time, may be it will start shrinking. Thanks to its one-child policy. India is now blessed with a young and growing workforce ready to brave all odds in the battlefield. Its dependency ratio—the proportion of children and old people to working-age adults—is one of the best in the world and will remain so for a generation. Europe & Japan are also going to face decline in the working-age population.

Sluggish recovery is going to aggravate the problem for these rich nations. The disparity between the rich on one hand & emerging economies on the other is soon going to result in favor of the emerging ones.

India’s state may not be all hunky dory but its private companies are strong. Indian capitalism is driven by millions of entrepreneurs (advancing at increasing rate) all furiously doing their own thing. Post 1990s, after new industrial policy came into picture, India opened up to international trade; liberalization & privatization followed. Since then Indian business has been growing. The country now boasts of world class companies as well as new models of small & medium enterprises. They are less dependent on good deeds by the government, and more on wisdom, innovation & will to survive.

And the Bad & Ugly…

Well, every coin has a flip & flop side to it, so has India, given all the factors certain critical parameters which cannot be ignored are infrastructure crisis, populism, corruption, fear of losing the outsourcing destination advantage soon, lack of graduates with employable skills & equal distribution of wealth & its percolation at lowest level.

There are 450 million poor in India (more than in entire Africa combined) implies 450 million who are not financially sound & have least access to health care services. The inextricate link among the caste, politics, access to education & status in society is unmanageable. Not to forget Maoists waging war in more than a third of the country & more states demanding naxalite affected status the situation is getting worse.

The most critical being lousy infrastructure because it will drive away the investments & halt all development plans. India needs to spend $1.2 trillion on urban infrastructure or at eight times today’s rate; China’s capital spending on cities is roughly seven times greater than India’s. (Source: Mckinsey Consultancy)

The other blockage is a dearth of competent skills which can sweep away the so called dividend. Public schools are a big mess. India boasts of many universities but they churn out graduates who are not able to apply skills to real-world problems (employers have to incur training costs). At present India’s adult literacy rate is only 66% whereas China’s is 93%.

India has to carve its way out from this muddle. Macroeconomic policies must be recalibrated. The government needs to concentrate on growth by taking stern steps in planned manner rather than just garnering votes & castigating the whole nation for its own interests.

  1. Suchandra says

    Loved the article . A perfect blend of statistics and deductive original thinking , it’s a signature Charu Sharma article :) . The way you’ve hyperlinked the references makes the reading even more easier and enjoyable. Hope to see your next article soon . Take care and keep on writing.

    1. Charu says

      Hey thanks for appreciating……that means so much :)…Such positive thoughts encourage me to put in my best effort.

  2. liju philip says

    good comparison of the good bad and ugly about India

  3. NukeEm says

    Stop using “INDIA SHINING” for every thing!! INDIA is NOT shining.
    India has been placed even below PAKISTAN in the corruption index.
    India’s per capita is still a miserable 1000$ compared to 3500$ of China.
    India is at 84th in the Top 100 corruption List!!
    India’s Bureaucracy is considered the third worst in the world!!!
    HAlf the poor in the world live in India!
    India’s education and Human Development Index is ABYSMAL!!
    India has 50% Reservations – which means 50% of the people who are below merit
    hold positions of responsibility!!
    35% of all Indian Politicians are Criminals!
    India is plagued by Extremism in Kashmir, North East and Maoism in HALF the country!!
    India is the TB capital of the world. India is the DIABETES capital of the world!!!

    INDIA is NOT SHINING!! A successful ceremony CANNOT dictate that India is Shining!!!
    Introspect you frogs-in-the-wells!! We’re a Pathetic country when it comes down to reality!!

    1. Charu says

      Well…….glass is always half full & half empty, depends on your perspective how you want to interpret it. & no individual is perfect so how can you expect country of billion people to be perfect!! i have not mentioned only games ceremony or just praised it, vices are there but you cannot ignore the good part. There’s always scope for improvement & India is on that path. If you cant appreciate, demeaning is not the way.

    2. Ravi says

      Let me put in my thoughts:-

      a). Not that it matters much but some of the facts are totally wrong. For ex- India is above Pakistan in corruption list – http://www.transparency.org/policy_research/surveys_indices/cpi/2009/cpi_2009_table

      b). Half the world’ poor live in India but more importantly India has more rich than poor now, doesnt that make the stats you quoted totally baseless: http://economictimes.indiatimes.com/news/economy/indicators/India-has-more-rich-people-than-poor-now/articleshow/6242437.cms

      c). 35% of Indian politicians are criminals. Yes thats coz we recognize them, in most countries the politicians screw up the judiciary so they are never recognized as criminals.

      d). India is plagues by extremism, yes and more importantly we are doing something about it. Some places in Africa dont even do anything to curb extremism its just a part of life now!

      “India is a pathetic country when it comes down to reality”: Totally ridiculous. Not because I am saying it because the world thinks India’s ecosystem is one of the best and thats what makes us one of the fastest growing economies in the world (inspite of the fact that we are at no.11 in world in terms of GDP and 3rd in terms of GDP PPP).

      I am not saying we dont have shortcomings I am just saying the comment above is the extreme reaction and even baseless to an extent

  4. ashish says

    Interesting read.. Fabulous work

    1. Charu says

      Thanks ashish ..that means alot.

  5. Anviksha more says

    nice peice

    1. Charu says

      Thank you anviksha…

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