Optimism about the Indian economy

Is India’s economy going to grow 7% this year ? Likely, says the Indian Express. Information Technology, Outsourcing and Pharmaceutical companies are emerging global challengers. Manufacturing, especially automotives show promise – at least in the domestic market. While the regulation in telecommunications remains an albatross, Indian telcos are still investing in network infrastructure, which is sure to provide them with a competitive advantage in the time to come. Agriculture seems to have done well due to a favourable monsoon. The rupee has appreciated against the US dollar (thanks to the falling dollar).

The real challenge is for India to be able to repeat and improve this kind of performance over several years – even decades. For this to happen, India needs to radically improve its infrastructure. I’d like to see the following priorities on the manifestos for the coming election:

  • Universal uninterrupted electricity
  • Universal access to hygeinic water supply
  • Universal access to telephone and internet
  • Universal access to motorable roads
  • World class highways connecting major towns and cities
  • Improved primary and secondary education

It is possible to achieve these substantially in five years; more importantly the government must allow private and foreign investment in each of these sectors.

I saw this article in the Economic Times, comparing growth rates for industrial production. So Pakistan tops the table this year, thanks to its IMF designed reforms. But that’s to be expected – its economy was in a shambles for so many years, that the growth figures are likely to look good, percentage-wise. India must compare itself with China and try to understand why there is a gap there. The way to close the gap is what the above list is all about.