It often seems to us that India is the forgotten man of economic speculation. The media focuses its attention on China and yet, India too, is set to grow and grow.
And where India differs from China, is that it is not sitting on a demographic time bomb. While China is a generation away for paying the price of its family planning policy limiting each family to one child, and joining the west with an ever dwindling working population to its retired population, India is set to see population of working age expand by 100 million over the next ten years. So the opportunity for India to become a major economic super power is obvious.
By the end of this year, annual growth will have been 7.6%, the third year of 7½% or more expansion. Next year while a slight slowing is expected, the country is still likely to grow by 7%.
But the IMF, in its latest pronouncement of the India economy, has warned that “while India appears poised to grow rapidly in the future, such an outcome is by no means assured.”
The International Monetary Fund warned that the government must not let the pace of economic reforms relent (a real danger, with many fearing that this is precisely what is happening.) The IMF wants the Indian government to rise to the challenge. India’s budget is due to be unveiled soon, and many fear a return to conservative, and only gradual reform.
© Investment & Business News 2013