SUPER POWER INDIA-2015 -SOME THOUGHTS
INTRODUCTION
INTRODUCTION
India must leverage in order to become a truly global superpower, because of the rapid growth in primary and tertiary sectors. Besides that, the conviction about India's demographic strengths and its ability to overtake China possibly by 2015.
In this context, it is really worthy in explaining the drivers of growth for any economy. To put forth, how the rate of growth of an economy depends on the factors of capital, labour and innovation aided by savings of an economy. It has been felt that developed countries rely up to 75% on innovation to fuel their growth and 25% is contributed by perseverance (labour and capital). Furthermore, how imperative it was for economies to develop their infrastructure to attract investments. While emphasis is on the infrastructure like power, roads and ports, the importance of soft infrastructure like Governance, law and order, stability and financial markets should not be diluted.
POSITIVE TRENDS IN INDIA:
During the period 1950 to 1980 both India and China, followed the Russian economic model and clocked a modest growth rate of 3.5%. In 1980, China changed its economic model and started clocking a growth rate of 9% while the growth rate of India still lingered at around 4%. It was only in 1991 that economic reforms were brought about in India and since then we have maintained a healthy growth rate in comparison to China. But India has still not been able to plug the gap China had created during the eighties.
To compare the two economics,
India is more efficient in the use of resources than China, which he substantiated with consumption of Oil and other resources within the two countries.
The disparity in the living standards between eastern and western China is more thus the progress shown by China is partial only to the eastern provinces.
Also China is surrounded by countries like Singapore, Hong Kong, Korea etc which are economically strong and healthy countries. On the other hand India has neighbouring countries like Pakistan, Bangladesh etc which have a weaker economy and not much scope for big trade relations. In fact China's dependence on its export-led model is one of the key problems facing the country.
India, on the other hand follows a predominantly service and consumption model with more dependence on home-grown entrepreneurship capabilities. This would strengthen India's position in the long-run compared to China which is still largely dependent on U.S.
Another strong point in favour of India is the rapid pace of continuing liberalization and the democracy which has allowed it to attract a larger number of foreign investors. China along with the longstanding dominance of the communist party and the problem of intellectual property rights has "made foreigners exasperated".
Despite China's present success and India's opportunities in the future, Dr. Swamy was quick to point out that both countries still face many problems due to a malfunctioning financial system. For instance, in China the banking system has become bankrupt and public sectors are uncompetitive. In addition to this China is yet to follow the World Trade Organization mandate that allows foreign banks to take deposits from Chinese citizens who are currently earning zero interest on Government deposits.
India's issue is not just purely due to the financial system but more related to state and center budgets, which in reality is bankrupt. In fact state government budgets are being financed by the center. Also, defense, subsidies, pension, salaries, interest on past loans are the irreducible components of the budget and they constitute 98 % of Indian government revenues. The rising issues at the Center have forced the Government to finance development projects through loans from banks. "For every rupee the government takes as fresh loan, 99 paise has to be paid for past loans and interest,"
We throw out existing people in power and bring in new people for taking reformative action." Therefore we may require another crisis and a revolution before we not only catch up with China but leave them behind.
The people are also an invaluable asset according to Dr. Swamy and India's rising population can be used for creating a strong economic growth model. "I want men also producing children if they can" he said on a lighter note. The one child policy (under heavy debate in India) has made in roads into China which now faces a declining active workforce. It is therefore a must to leverage India's clear demographic advantage, by actively promoting primary and secondary education.
India has the capabilities and innovative capacity to spearhead the convergence of Information technology, biotechnology and nanotechnology which is sure to bring about a huge boom in the economy. The citizen has to elect leaders intelligently and to elect those with the ability to perform in a modern and complex world. The goal should be to compete headlong with the US on innovation, and to innovate we must build an atmosphere of freedom and high quality education.
"Sale of advice" is defined as unbiased recommendation and solution to problems faced by various client firms with an "outsider looking in" approach. The three fundamental steps in a consulting project are:
To diagnose the problem, device solution and implement it. The essence of management expertise in a consulting business is: knowledge acquisition, consolidation and exploitation. It is significant to learn by experience dealing with customers and apply this knowledge appropriately for a new problem and a new customer.
It is observed that it is difficult to always find all the right people a customer wants in terms of specialization and credentials, in which case it is necessary to collaborate with competitors and exploit the synergy of resources.
With regard to the growth opportunities in India, It is noted that global clients increasingly want to exploit the off-shore advantage which India provides. The overall domestic demand is also on the rise due to booming sectors like financial services, knowledge management, entertainment & media, aviation, hospitality and retail sector. Every business was optimistic about the upswing in global demand for both analytical consulting based on data crunching and management consulting by working closely with clients.
EPILOGUE:
From the aforesaid discussion it is felt that, the values, ethics and passion that one needs to inculcate and the need to align what one does, sees & says, for succeeding in a business. While starting a business, one has to be conscious of the following:
wrong reasons for choosing a business, importance of being passionate,
Choosing the right team, right business plan and how one is different from others while doing that business.
SUPER POWER INDIA-2015 -SOME THOUGHTS
By: DR.R.SRINIVASAN
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