26
May

India: 61 years of independence.

Escrito el 26 mayo 2008 por Rafael Pampillón en Economía Mundial

On 15 August next, India will celebrate 61 years of independence. The former British colony has the largest population in the world after China and it is the largest multi-party parliamentary democracy on the planet. It has a potential that could turn it into one of the driving forces behind the world economy in the 21st century. However, a significant part of the population lives in misery.

As a result, India has a long way to go in areas such as reducing poverty and the migration of workers from the country to industry or services. Unlike China, the Indian population of around 1,100 million inhabitants is very young. Even so, India can only take advantage of this demographic advantage if it creates sufficient jobs for the people who constantly join its workforce; otherwise, the high levels of unemployment could exacerbate social tension.


Despite the importance of its technological sector, as an economy, India is still far from reaching the importance of China, which is presently the world’s factory. However, India is becoming the great world services provider. Firstly, this is due to the high level of education of part of its population and, secondly, to the fact that salary costs are very low, which means that it can offer very competitive goods and services on international markets. For this reason, India attracts many American and European companies from the services sector, especially software, which subcontract many services to Indian enterprises.

The 21st century will be an Asian century. Thanks to its vast size and formidable exporting power, China is already becoming the economy of Asia and the world. However, China will not stand alone in the world economic order. India has the potential for being there with it. India is the China of the future.

Comentarios

Fernando Peral 27 mayo 2008 - 15:05

Indeed, Indian Corporations have risen spectacularly over the las 15 years, India is a nuclear power and its GDP reached 1,4 trillion US$ in 2007.

But one should also bear in mind less favourable figures, that are as real and significant as previous ones:

India’s population is of some 1,13 billion inhabitants, 27.5 % of whom have an income below 0.40 US$/day, and the illiteracy rate is above 40%.

Less than 10% of the population speaks English, and there is no national scheme of social security nor of health services. More than 60% of the workforce is on agriculture.

Its external debt is above 18% and, in 2007, its fiscal déficit was of 5.5 %.

It is evident that, in the present situation, the economic importance of India has grown dramatically, but that the current downturn of consumption in major markets (US, Japan and EU) will inevitably affect its growth rate over the next three to four years.

India cannot be considered as a giant with clay feet, its internal imbalances mean a greater exposure to present world’s economic turmoil.

Christian 22 abril 2011 - 00:36

The imbalance is mainly caused by the caste system. If you are born in a lower caste you nearly have no chance to finish school. Nevertheless the government decided last year that every child with 6 years an older is allowed to go to school for free. I think this is an important step but others have to follow.

nearshoring 5 agosto 2017 - 19:45

Nearshoring production in Europe will become more productive
http://www.koukio.com/nearshoring-for/

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