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Economic Survey


Indian economy has in recent years come of age by clocking 9%+ growth rates for three consecutive years from 2005-2007, before being struck by impact of recession and slowing to 6.7% in 2008 and is expected to grow at 7.2% in 2009. For the financial year 2010-11, indian economy by its resilient recovery and prosperous domestic strength is expected to clock above 8.5% and then eventually moving back to 9% growth rates in following years, perhaps this is first time in our history we stand at verge of crossing over to 10%+ growth rates, sustained for long.In the decade, 2010-2019, india is set to overtake china to become world’s fastest growing big economy .The high growth rates is a great advantage for india’s low per capita incomes, since the per capita incomes too will grow at minimum 8% if GDP is sustained at above 10%. Growing per capita incomes means , richer india, and richer india means higher consumerism, better standard of living, and better services. India is going to be a market no one can longer tend to ignore, the Airbus, Volkswagens, Walmarts, Siemens, Goldman Sachs , you name a big MNC, and you will find it competing for a place in india. And perhaps not only MNC’s, this will be a decade for our domestic industries and companies, Airtel, ICICI Bank, HAL(DRDO, ISRO), NALCO, NMDC, Reliance, Tata Group, Infosys, ONGC, all would be at par with the big MNC, perhaps defeating the IBM, BP, Vodafone, etc.

It will be a decade , millions of indians will get employment opportunities, poverty rates decreasing, power deficit narrowing and banking becoming revolutionary. it will be a decadew when we will go to space, we will have indigenous weapon technologies, world class retail stores, superb airports, railways, and expressways, finally we will have infrastructure we so much envy for looking at west.But all this is still a nascent dream that has to be nortured and realized with great prudence, vision and efficacy.And lets be realistic on ground that we face challenges too, that makes our dream of glory overshadowed by misfortunes of poverty, disease, and corruption.I believe poverty in india is not the biggest challenge we face today, it is provision of basic services of food, health care and education to the poor that we have to take care of.Our growth rates , make it easier and key technological progress in IT services that we have made, in mobile connectivity revolution shall help the policy makers in the coming years to target specific poverty alleviation schemes e.g direct cash transfers.

Taxation reforms round the corner , like DTC, And GST shall help in putting more money in hands of people and help higher savings and investments. We have been a large consuming nation , with consumption rates in excess of 60%, this though has helped domestic industries and multinations to bring in vast quantity of products for all, has hurted our savings and exports for long.Only in recent times has the trend started to change , with savings rates climbing to 35%+ and investments rate peaking at 37%. Our exports are growing at 20%+ and we are expected to reach 5% of world merchandise trade.FDI , FII and remittances have been strong and will continue to swell our capital account over and above the current account, thus helping in having positive foreign exchange reserves.

Going into the new decade we face challenges of raising agricultural productivity, yields per hectare and also bringing in technologies to agriculture that help use our limited water resources in effective way, so that we dont just over use and have fate of agri basket of india, Punjab ending as barren land in distant future, newer and better techonlogies of irrigation are a must, and hence should be agricultural investment encouraging innovations, we have to shift agricultural labour to more productive activities of manufacturing .We have to become self sufficient in grains, pulses and edible oils, and have huge stock reserves of crops to feed the poor at subsidised rates that can be afforded.

Power sector though has made progress in connecting villages to grid, but we face deficits of 12% that makes the line feeding limited to only a few hours a day, in cities let alone villages, and a reason for that has been that we didnt invest much in infrastructure projects of which power forms a major chunk, and private sector has been away from this because of huge capital investment and longer gestation periods, but as we approach the decade we have a dozen of private players competing for a name , aiming higher and higher production , building plants of 2000 MW and even bidding for UMPPs of 4000 MW, we have nuclear deal signed , giving us access to civilian nuclear energy market and thus allowing imports of nuclear reactors from advanced nuclear countries, which will help us achieve in excess of 20 GW by 2020, wind energy , where we should be proud as we rank amongst the top 5 countries and have a world leader domestic firm SUZLON producing power equipment. And is perhaps the most opptimistic sector in renewable energy generation where we are bound to achieve success. Solar energy being expensive , has so far been only a minority contributor, but with increasing energy innovations , efforts are on to make it cheap , and we have the biggest potential to produce energy from solar and photovoltaic mirrors.No wonder we need 370GW energy production by 2017 to have peak deficit down to manageable conditions , meaning we have a colossal task in lifting generation from present 160 GW, majority of which will come through coal fired plants .Since no matter what we owe responsibilty to environment , we must invest in clean coal technologies and target in reducing emissions.

Our urban infrastructure is in shambles today, congested and on brink of collapse, needs massive investments given the pace of urbanisation. We need to build not only highways, but upgrade them every now and then to expressways and link ways.Given our automobile sector growth, we can’t depend on roads as the most primary source of transportation in developed india, there is need for mass transit system , that be clean, efficient and quick.We need metro rails, airports, and latest mass transit sytems to carry millions every day to work in our huge cities to be emerging , with population sof above 4 million.We need rural connectivity with better roads, railways so that we can connect with cities and provide food, fertilisers and necessary supplies.

Our defence from external threat is best safeguarded by not only powerful million plus armed forces, but by powerful armed forces equipped with latest weaponary. I strongly support armed forces modernisation, newer jets, naval vessels and tanks and missiles should be both acquired and produced domestically.But wre should keep it in our mind , that we modernise our forces only for defence of our territory from aggression and not to use them self interested offensive plans. And so we should try to allay fears of our arms build up to our adversaries who will like to competer in arms race with us, thus damaging regional security.

Education sector , has seen a spurt in urban india, with enrollment ratio in higher education improving, but still overall GER is about 11%, way low when compared to economies we want to compete with in East Asia, who have 35% GER, India has the best demographic dividend to go into the coming decades, but what use will it be, if youth ends up illiterate, it will only add fuel to insurgency , and old false ideological activities of lenin ad marxism, we need educated youth , and employment opportunities to employ them , target should be to raise GER to about 30% in coming decade , and also focus on quality of education , rather than mere quantity , open up lucrative research institutes and encourage students to do research and publish papers and journals.We need patents and innovation, and quality education system is the only thing that can accelerate skill development and rapid industrialisation .

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