Prof. Kishore Kulkarni, Metropolitan State College of Denver
It is now a common knowledge that India’s economy has been growing very impressively for the last 12-15 years. Recall that in the last decade, Indian economic growth rate was second only to that of Chinese. In 2010 and 2011, with 8.5% growth rate in a roughly $1.3 trillion GDP, India has taken some significant strides in becoming a major economy of the world. Compare that with 2 to 3% growth in the 1970s and 1980s, when – among other distressing things – Indian policymakers were in a confused state of affairs.
In terms of purchasing power of money, the Indian GDP ranks amongst the top ten national GDPs. India has increased exports significantly, which has helped her buy foreign goods and create a substantial stock of foreign reserves (roughly $280 billion worth in 2011).
This economic growth is made possible by a boost in the service sector, primarily in the software and computer industry. The increased demand for software and computer engineers has increased wages exponentially, and has created a wealth effect that has not only raised the need for better infrastructure and goods and services, but has also trickled down into other parts of the economy. The poverty level has moderately declined, and the increased per capita income is seen in many a places.
This improved economic condition has, therefore, brought much hope in the minds of frequent visitors, as well as in the minds of foreign investors who look at the Indian economy as a worthy destination for their investment. So, the main question is: Can this growth be continued in the near (2012-2013) and probably far-distant future?
Without reservation, and by any standard one wants to measure the growth, the Indian economy has been moving in an enviable fashion. But to some sociologists, this may seem only an exercise that has increased income inequality. A simple statistical fact is that when some sectors grow, even if others stay at the same level, the inequality of income automatically increases. The Indian case is not very different from this trend. When 33% of the population is still below the subsistence level (defined as an income of $2 per day), India needs to keep growing for a long time to reduce absolute poverty to a manageable level. Second, one can point out the “digital divide” that has created two separate population groups within India. The so called “skilled” (and elite) people live a whole different lifestyle than the poor and unskilled ones. Bridging this divide will be a challenging and a monumental task in the future.
In terms of purchasing power of money, the Indian GDP ranks amongst the top ten national GDPs. India has increased exports significantly, which has helped her buy foreign goods and create a substantial stock of foreign reserves (roughly $280 billion worth in 2011).
This economic growth is made possible by a boost in the service sector, primarily in the software and computer industry. The increased demand for software and computer engineers has increased wages exponentially, and has created a wealth effect that has not only raised the need for better infrastructure and goods and services, but has also trickled down into other parts of the economy. The poverty level has moderately declined, and the increased per capita income is seen in many a places.
This improved economic condition has, therefore, brought much hope in the minds of frequent visitors, as well as in the minds of foreign investors who look at the Indian economy as a worthy destination for their investment. So, the main question is: Can this growth be continued in the near (2012-2013) and probably far-distant future?
Without reservation, and by any standard one wants to measure the growth, the Indian economy has been moving in an enviable fashion. But to some sociologists, this may seem only an exercise that has increased income inequality. A simple statistical fact is that when some sectors grow, even if others stay at the same level, the inequality of income automatically increases. The Indian case is not very different from this trend. When 33% of the population is still below the subsistence level (defined as an income of $2 per day), India needs to keep growing for a long time to reduce absolute poverty to a manageable level. Second, one can point out the “digital divide” that has created two separate population groups within India. The so called “skilled” (and elite) people live a whole different lifestyle than the poor and unskilled ones. Bridging this divide will be a challenging and a monumental task in the future.
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
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IIPM: Indian Institute of Planning and Management
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting
IIPM Prof. Arindam Chaudhuri on Internet Hooliganism
Arindam Chaudhuri: We need Hazare's leadership
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management
