Crisil Research in its recent report says it expects the Indian economy to grow by 6.5 percent annually between 2014-15 and 2018-19. However, it clearly states this kind of growth will be possible only if there is a decisive mandate in the Lok Sabha polls. This is good news for the Indian economy considering the International Monetary Fund (IMF) has predicted around 4 percent global growth for calendar years 2014-18. However, GDP growth at 6.5 percent is in no way close to the 9 percent growth seen 2003-04 to 2010-11, which was briefly hit by the global financial crisis in 2008-09.
The Conference Board forecasts the economies of China and India will slow from 2014-2019 to 2020-2025 (from 5.9 to 3.5 percent in China and 4.8 to 3.6 percent in India). Overall, emerging economies’ growth will slow to 3.2 percent on average during 2020-2025 from 4.3 percent during 2014-2019.
India with 6.5% GDP growth and 1.0-1.2% population growth will not be catching up with China and will barely be making any progress compared to the USA at 2.0-3.5% GDP growth. It would take about 50-70 years for India to double its relative GDP compared to the USA if India is struggling to get to 6.5% GDP growth.
The World Bank International comparison program of 2011 indicated that India had 37% of the US economy in 2011 in PPP (Purchasing power parity terms). However, catching up that 2.5 times will be difficult.
With 6.5% average GDP growth, non-farm employment over this period will at best grow by 37 million. This means an additional 14 million will be forced to either depend on low-productivity agriculture or remain unemployed, as per the report.
India has huge problems that will take a long time to solve –
40-45% of the population has health and development problems from malnutrition
India has effective literacy rates (age 7 and above) in 2011 were 82.14% for men and 65.46% for women. This is a very low standard of literacy that is not being met.
India has vastly inadequate infrastructure. Modi has indicated that this is a top priority.
Brian Wang is a Futurist Thought Leader and a popular Science blogger with 1 million readers per month. His blog Nextbigfuture.com is ranked #1 Science News Blog. It covers many disruptive technology and trends including Space, Robotics, Artificial Intelligence, Medicine, Anti-aging Biotechnology, and Nanotechnology.
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