| August 18, 1997 | ||
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India 2047
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C O N O M Y || A N D || T R A D E
The structural transformation of the economy over the next five decades will be striking. A 7 per cent overall growth rate, along with an annual 3.5 per cent average growth in value addition of agricultural products, will bring down the share of agriculture in gdp from 30 per cent at present, to a mere 6 per cent within 50 years. This is consistent with what has been witnessed in Malaysia, Thailand, Indonesia, Brazil and Mexico at their present levels of per capita income. Today, 60 per cent of the population is engaged in agriculture, which accounts for 30 per cent of the income generated. The average agriculturist's income is therefore only half that of the non-agriculturist. To prevent the widening of rural-urban income disparities will require a reduction of the population dependent on farming to 12 per cent -- a major challenge. Yet India's diversified farm output will position it among the foremost agricultural producers in the world. Employment will grow not only in the services and manufacturing sectors but in the non-farm sector as the dynamics of growth generates backward linkages in the countryside. The nature of employment growth is bound to be more labour intensive than before because of the increasing export orientation of the economy. However, enhanced participation by women and the rising net annual addition to the labour force will further add to the pressure on jobs. If the decade-long increase in adult literacy continues at no more than 9 per cent per annum as in the '70s and '80s, universal literacy should be attained well before 2047. This will upgrade the quality of the labour force and have a positive effect on the quality of the polity. Rising expectations will compel greater investment in social development, making for a better quality of life by 2047. Also, with the dismantling of controls and discretionary regulations and greater transparency in the system, there will be a decline in corruption. Gross aid inflows of $3 billion today compare with private foreign inflows of $9 billion. Concessional aid from multilateral institutions will further decline over time. Long-term non-concessional borrowing from the World Bank and ADB may continue. Even so, private capital will dominate external capital flows. India can be expected to implement further policy reforms to take advantage of wider and deeper globalisation. These opportunities will arise through the World Trade Organisation and membership of various regional economic groupings. The creation of world-class infrastructure and a business-friendly environment will be essential with mutually beneficial strategic considerations with leading mncs. India will by 2047 be an open economy, ranking among the top 20 trading and investing nations. Its trade should account for nearly 40 per cent of gdp and around 5 to 7 per cent of global commerce. Prime candidates for export growth include agro-products, processed foods, a range of manufactures and services including software, consultancy, audit, medical and educational services. India is poised to expand its trade and investment links with the asean-10 and will join APEC in the near future. By 2047, its trade, investment and technology links will be the strongest with apec, surpassing those with the European Union. Relations will also expand with countries of the Indian Ocean Rim -- Association for Regional Cooperation and a few regional growth quadrangles. The South Asian Free Trade Association will have been established by 2005. By 2047, intra-saarc trade will account for a fifth of India's global trade. With Russia's resurgence, India's economic ties will become much stronger. China will be a significant business partner.
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Editorial Office: © Living Media India Ltd |
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Standing
on the crossroads of a millennial opportunity, will India
be able to make a leap -- let alone a great leap -- into
the next century? Here is the big picture.
