India is doing well. The International Monetary Fund (IMF) has come out to state that the economy will grow by 9.7 percent in 2010 and 8.4 percent in 2011. That India has well and truly recovered from the recession is now well-established and it is currently undergoing a transition from the public stimulus to private sector-led growth.
The economy is on the fulcrum of an increasing growth curve. India is growing faster than just about every other country with China being the only exception . Given this backdrop, one can say the economy is back on track and the major drivers for further growth are in place.
According to a leading consultancy house, the economy will grow fivefold in the next 20 years. This is probably why the foreign institutional investor (FII) investments in India are continuing unabated despite the rising valuations.
Factors supporting growth
Some economists think India will grow faster than any other large country over the next 25 years. They feel two factors will be major contributors to this growth. The first factor is the information technology revolution that is taking place in the country.
This is led by mobile connectivity. The rapid penetration of mobile services to the hinterland has brought about a connectivity that is about to bridge the difference between ‘urban India’ and ‘rural India’ . For the rural parts that suffered severely due to very poor infrastructure, like lack of roads and electricity , mobile connectivity is a means to overcome deficiencies of physical infrastructure .
Mobile is no longer a talking device to connect to family and friends. It is now a business tool to conduct various operations like banking, gathering information and trading. This technological revolution could prove to be the game changer for the country .
The second advantage India has is that of its dependence ratio – the proportion of children and senior citizens to working-age adults – is one of the best in the world and will remain so for a generation, in the opinion of many economists. They say that India’s economy will benefit from this ‘demographic dividend’ , which has powered many of Asia’s economic miracles in the past.
Demographers say the emerging world will stay young while the rich world ages. In 2020 the median age in India will be 28, compared with 38 in America, 45 in Western Europe and 49 in Japan. These factors will come into play in the shift of power from West to East in the next 40 years in the world
(From ET, 17.10.2010)