India
A growing economy By Koushik Dutta
India: rising GDP growth
% average annual GDP growth
1900 – 1950 1.0 1950 – 1980 3.5 1980 – 2002 6.0 2002 – 2006 8.0
• What do these figures tell you about the Indian economy?
Population growth
% average annual growth
1901 – 1950 1.0 1951 – 1980 2.2 1981 – 1990 2.1 1991 – 2000 1.8
2001 – 2010 1.5
• What do these figures tell you about population growth in India?
% 1950 17 1990 52 2000 65
2010 (projected) 80
• What do these figures tell you about changes to education
in India?
Adult literacy rates
% of population Million People
1980 8 65
2000 22 220
2010 (projected) 32 368
• What do these figures tell you about the service sector economic growth in India?
People categorised as middle class
Estimates of those in poverty
1980 46%
2000 26%
2010 (projected) 16%
• 1% of the people have been crossing poverty line each year for 20 years. Equals 200 million people.
• What do these figures tell you about anti-poverty strategies in India?
Poverty statistics
Productivity is rising
30% to 40% of GDP growth is due to
rising productivity
India is now the 4th largest economy
It will overtake Japan between 2012 and 2014 to become the 3rd largest world economy
DRIVERS OF GROWTH
India East and S.E. Asia
Domestic Exports Services Manufacturing Consumption Investment High tech, capital Low tech, labour intensive industry intensive industry
What is the implication of the Indian model?
• Has India skipped the industrial revolution?
• How does India take its people from farms to cities?
Rise of globally competitive
Indian companies:
Reliance, Jet Airways, Infosys, Wipro,
Ranbaxy, Bharat Forge, Tata Motors,
TCS, Bharati, ICICI and HDFC Banks
Demographic trend points to sharp increases in input factors
54%
46%
25+ yrs
0-25 yrs
Demographic Split
420800
0200400600800
1,0001,2001,4001,600
2005 2025
1.5 bn
1.1 bn
Labor Force
Labor Force will double in the next 20 years
Demographic trend points to sharp increases in input factorsAge Dependency
72%
45%<50 %
62%
0%
20%
40%
60%
80%
1980's 2002 2025 China 2002
17%
42%35+%
24%
0%
10%
20%
30%
40%
50%
1980's 2002 2025 China 2002
Savings Rate
Higher savings and investment rate will translate into higher GDP growth
“By 2010 India will have world’s largest number of English speakers”
“When 300 million Indians speak a word in a certain way, that will be the way to speak it.”
-Prof. David Crystal, Cambridge Encyclopedia of the English Language
