|
With the worst of the economic crisis behind us, we look ahead to
forecast trends for the decade ahead ? growth is set to be much faster than the
last ten years. The driving force of the decade? Transport, storage and
communications - a large road network is going to be operational, ports are
rapidly improving, air transport infrastructure is being overhauled, and most
important, a strong ecosystem has been created for the telecom sector.
The mainstay of the Indian economy for so many decades, agriculture
could well grow faster than the expected 3.4% - a rural road network has been
built up, high agri commodity prices would improve terms of trade towards this
sector, rural human capital has improved tremendously in the 2000s, new
technologies are about to enter on a mass scale, agri reforms such as the APMC
acts are being overhauled. Though it is difficult, to time the tipping point,
in Indian agriculture ? we would expect it to be somewhere after the middle of
the decade though we may need to wait till the 2020s for the full impact of
these changes to be felt.
Rapidly growing domestic and international markets will keep
manufacturing opportunities buoyant, but there would be spoilers in the shape
of energy, wage price inflation, the unresolved labour and land issues.
Bottom-line? Overall GDP growth will be around 9.6% annually, even
if the government does not do anything radically different. It would be higher
if agriculture and electricity, gas and water supply are able to break through
their long term institutional constraints. It would be lower if inflation eats
into macro-economic stability and law and order conditions get out of hand.
This does translate into greater per capita income and changed
households budgets. Here again, transport, education, health and recreation
would all be among the most rapidly growing items of consumer expenditures. The
tipping point is not so much in health or education in the aggregate, but in
goods and services that promise better lifestyles.
Despite such a rosy scenario, India will not rid itself of poverty
- almost 200 million persons are likely to remain extremely poor by the end of
the decade. Social safety nets would continue to be critical ? the impact of
these on the fisc can be minimised if governance and institutional change
remove inefficiencies in distribution.
Indians remain one of the most optimistic people on the globe,
growth prospects are bright even as numerous issues need to be resolved. But
the true test of success would be when the energy in entrepreneurs and
consumers brings us a greener, more equitable decade.
P.S A more detailed explanation of these forecasts and trends, with
graphs was published in the Indian Express, available now on our .
|