INDIAN GDP GROWTH STORY – WHAT TO EXPECT?

K. Periasamy, M.Tech (Chem. Engg), Chennai – 600096.

There is great expectation on the growth rates of Indian GDP in the next few decades. This expectation is

based on close to double digit growth rates achieved in recent years and the experience of dramatic growth

rates achieved immediately after liberalization by Japan, South Korea and Asian Tigers about 3 to 4 decades

back, and China in the last 2 decades. But this expectation for India is a bit too optimistic due to the

following factors:

1. In Developed Countries like US, Canada, Most European Countries, Japan, Korea, etc there is

stagnation in population growth. Old age proportion is increasing fast. The concept of earning and

saving for future is fast diminishing. The pride of family with roots going back to several generations

is becoming irrelevant with more and more Inter ethnic, Inter Continental marriages / divorces /

remarriages, living together / Homo marriages, etc.

All these factors have lead to drop in demand for goods and wealth accumulation. Also there is

dramatic improvement in the social security schemes of these Countries, which obviates the need

for earning more to save more.

So, the export opportunities of low cost products and services to these Developed countries enjoyed

by Japan, Korea, Asian Tigers and China when they were growing fast, are not available at the

same level for India to exploit today.

2. When Japan, Korea and Asian Tigers were ruling the exports, not much of competition from other

cheap countries, except for China in the last 2 decades and a token presence by India / Brazil in the

last one decade.

But today, India has to compete with formidable China along with many other players like Pakistan,

Philippines, CIS Countries, Brazil, Latin American Countries, etc. apart from the established players

like Korea, who are going strong even today. May be Japan is losing steam.

3. Except China, the rest all countries whose growth rates we are trying to emulate, are much smaller

in terms of total GDP. A few big Steel Plants, a few Industries like Automobile, Ship Building, etc, a

few mass produced Consumer Goods like Radio, Camera, TV, Cell Phones, etc could dramatically

push up their GDP growth rates. But it is not the case with India whose total GDP is so high that it is

equal to that of Taiwan, Singapore, Malaysia, Thailand, Hong Kong and Bangladesh all put together.

Of course, our problem is the per capita GDP, which is nowhere near many of these countries!

4. All the Countries which have grown faster have witnessed complete liberalization of their economies

with free flow of Foreign Direct Investment (FDI). As can be seen from the Global FDI Trend Chart

given in next page, Developed economies have been receiving major chunk of net FDI. Only in

recent years, starting from 2007 onwards there is some change and a good proportion is flowing to

Developing Countries.

Obviously FDI has played a crucial role in the growth of Developed Countries. It is obvious that it

will play an important role in the growth of Developing Countries also, wherever it flows in higher

proportions.

China and India both started their liberalization, privatization and globalization during the early 90s.

But, China went full steam ahead without any hindrance. Though it is run by Communist Party,

China completely switched over to Capitalistic policy. The Country endorsed the famous statement

“I don’t care whether it is a White cat or Black cat. It is a good cat as long as it catches mice” made

by its Premier Deng Xiaoping in 1961.

Unfortunately, India could not go full steam ahead with its liberalization and globalization. Ironically

the same Communists who practice hard core Capitalistic policies in China were the impediments in

India. They opposed anything and everything – the Liberalization, Sale of even small percentage of

PSU Shares, Computerization of Banks / Railways / Insurance, FDIs, Oil exploration by foreign

Companies, Private Investment in Steel, Cement, Power, Insurance, Banks, Roads, Ports, Airports,

Railways, etc. Obstructions had to be cleared during each step and the Government had to be

always defensive as if they are doing a sin, while clearing each and every proposal.

Due to this obstruction by the Communists and certain other inward looking Regional Parties, India

was left behind in the race for FDI. While China was receiving net of about 20 – 50 Bn USD every

year in the past 20 years, India was way behind with hardly 2 – 20 Bn USD and that too in the past

10 years only. The total net FDI of China as of 2011 was 800 Bn USD as compared to just 82 Bn

USD for India.

One would expect that at some point of time, China will no longer be competitive and the FDI will

eventually come to India. Logically it should happen. But unfortunately there is slow down in the

International FDI flows due to various reasons like, investments by cash rich Middle East Countries

in their own Countries, slow down in the overall economic growth of all Developed and Developing

countries, busting of some countries like Greece, Spain, Italy, which have lived beyond their means.

Hence, it is most unlikely that India will get FDI anywhere near that of China, unless something bad

happens to China.

So, FDIs coming into India in any big way and sustaining the growth story of India is not all that

bright.

5. In recent years, we have invested in many infrastructure projects which are either slow in giving the

required results or they are not at all giving any returns for various reasons. For example, we have

made big investments in Coal / Gas Power Plants. But unfortunately we have not been able to mine

the required coal due to local objections, mainly due to improper compensation and R&R packages

offered to the project affected people. The Gas availability and gas import infrastructure did not

keep pace with the investment in Gas based power plants. The KG Basin Gas field of Reliance

Industries which was expected to produce about 85 MM CM / Day is producing just 35 MKCM/Day.

The total reserves of this Gas Field has also been downsized drastically. When we went for Coal

import, the international coal price has skyrocketed. Even if we are ready to import at that price, port

capacity is not adequate to handle additional coal import.

This has resulted in underutilization of fixed assets which ultimately affects the growth rate in the

medium term.

6. In the past 10 years, we have invested huge sum on Road Sector thinking that we are doing the best

service to our economy. But actually it is not that good as trumpeted to be. For a Country with 80%

oil import, relying on Road sector for 65% of goods movement and 85 % of passenger movement is

highly idiotic. This literally adds fuel to the fire since Road transport consumes fuel close to 2 to 3

times as that of Train and 4 to 6 times as that of Water transport, for every Ton.KM of transport.

This is bleeding the economy with about 53% of foreign exchange earned going for the import of 160

Billion USD worth of Crude Oil in 2011-12.

If only we had opened the Sethu Canal and introduced regular shipping between Haldia and Kandla

touching all the 12 major ports enroute, with feeder vessels to minor ports and Train / Road

connectivity to all ports, we could have saved atleast 25% of Crude Oil import. Another 25% Crude

Oil import could have been saved if the Rs. 1,00,000 Crore spent on National Highways in recent 10

years had been spent on Dedicated Freight Corridor along all major trunk routes of Railways.

Only for short distance passenger movements and for the last leg distribution of goods to end users,

we should rely on Road Transport. But by developing Highways and ignoring Ports / Railways we

have been continuously moving in the wrong direction leading to this alarming situation of spending

huge amounts on Crude import. This is one of the major impediments for our long term growth. The

reasons given under point 5 & 6 are the major factors responsible for the persistent high inflation in

recent years, apart from subsidies and some unsustainable welfare measures.

7. In the name of supporting the growth and the bottom strata of society at large, we follow the concept

of Consumption based subsidies as against the prudent economic policy of Production based

incentives.

We want to reduce fertilizer subsidy and kill Fertilizer Companies but increase food subsidy. We

want to give subsidy for LPG and Petrol but want to kill the Oil Companies and related capital goods

industries. We want to give cheap housing loans but we want to tax the Cement Plants and Steel

Plants as much as possible. We want to subsidize electricity and we want to increase royalty on

Coal. We want to keep the Bus fare low but we want to increase the Tax on Bus. These are few

examples of our policy paradox.

If the intention is to support the consumer at the bottom strata of the society, then support the

population Below Poverty Line only. Why all and sundry should enjoy subsidy which leads to over

indulgence at the top bracket of the society at the cost of the Producers of goods? This ultimately

affects the investment thereby slowing down the long term growth of the economy.

As there is no ray of hope in reducing the consumption based subsidies, it is going to pull down the

production in all spheres of economic activity. If the trend continues like this, it is going to be

Distress Greece story instead of Growth story of India!

8. There is one clear aberration in India’s growth story and that is the prominence given to Service

sector growth over that of Agriculture and Industry. The economists think that the Service sector

share has to go up in India also in line with that of Developed economies. But it must be clearly

understood that any service if it does not add value, and that too in the most efficient manner, it is a

drain on the economy and overall growth. For example, if we can manage with one Bank with

required minimum number of employees in a street, we shall do so. In the guise of giving

employment, if we open more Banks / Branches in that street and count it for Service Sector growth,

then we are cheating ourselves!

Realistically speaking not all services shall be counted for GDP. Only those services which directly

result in tangible products, those services which bring out natural resources, those services which

bring in foreign exchange, etc. only shall qualify for counting as part of GDP. All other services if

counted for GDP growth then it will only be a misconception. In that case, total GDP will not be a

true measure of the actual prosperity of the Country. Also, it will lead to the busting of the economy

as everyone will be busy managing / consulting / servicing / selling and no one will be actually

producing.

Precisely that is what is happening in India. In the name of communication growth, we have too

many Cell phones leading to wastage of precious production time which is much more than the

benefit which is supposed to be accruing to the economy by way of better communication. The

entertainment sector is growing faster than any others. The Tourism and hospitality sector (not

healthcare) based on domestic travelers, which does not contribute to GDP growth in the right

sense, is growing leaps and bounds. Despite investing in computerization, ATM, Internet Banking,

etc more and more Bank Branches are mushrooming with Tie wearing Bank brokers knocking at the

doors of every household for opening accounts or taking loans.

These are only a few examples for highlighting the fact that the Indian Growth story basking on the

lime light of Service sector growth is only a mirage.

9. All the Developed economies have made sacrifices in terms of Health, Safety and Environment

during the initial phase of their development, atleast for few decades. Whether they liked it or not

and whether we are ready to emulate them or not, it is a blatant truth.

Many Countries have had slavery and hence very high productivity. Many Countries did not have

labour Union itself till they grew to a substantially advanced stage. Thames River in London was

practically carrying all the coal washery wastes and other industrial pollutants for several decades,

before it was cleaned in the beginning of 20th Century. Chicago sky had been pitch dark for few

decades with smoke emanating from the Chimneys of thousands of highly polluting industries. The

River waters of Europe were highly polluted before the Chemicals and Dyeing industries were

shifted to Developing countries.

Employees who were working even at the Top floor of Empire State Building in USA during

construction did not wear Helmet and Tie rope. Boiler explosions and accidents in Chemical

industries in US were so common and Governments were so callous that, the Industry Associations

themselves brought about Design and Safety standards which were later made as Codes by various

States of America. These were happening even when USA had overtaken most European Countries

and not during its initial development stage.

Unfortunately we became aware of Trade Unionism and HSE issues much earlier in our

development phase. Our Organized Sector employees could get Free Shoes and Uniforms even for

office use long before, while the Agriculturists are unable to buy proper foot wear to protect their foot

from snake bite even today. As a rule, our Organized Sector is guaranteed of subsidized Snacks and

Lunch long back. But still we have thousands of villages without even drinking water

guarantee. Our un-employed Graduates (for whose skill development lakhs of rupees has been

already spent) were eligible for unemployment tolls long before, even while there are not enough

teachers in several thousand Schools, even today.

Long back we were aware of the destruction of trees by Dams, while we are not yet aware of the

death of malnourished children. We are ready to enact Coastal Regulatory Zone (CRZ) Act, even if

it makes it almost impossible to set up any Port / Industry on the coast. It is simple common sense

that civilizations have grown along Rivers and Coasts only exploiting their advantages. We are

ready to allow the flood to destroy thousands of acres of agri / forest lands and kill thousands of

people and animal year after year. But, we will not allow the one time submergence of few thousand

acres of forest upstream of a Dam or the displacement of few hundred people, whatever may be the

compensation package. For us, principles (!) are more important than people !

We became too familiar with our Rights before knowing our Duties. Naturally our productivity is

much lower. Now, there is no scope for productivity improvement. In offices (both Private Sector

and Public Sector), Joining Parties, Leaving Parties, Transfer Parties, Promotion Parties, Retirement

Parties, Birthday Parties, Marriage Anniversaries, Father’s Day, Mother’s Day, Valentine Day, etc,

which were never accepted during office hours are all legitimate rights today. Trade Union Leaders

and Sports personal are officially exempted from any regular responsibilities. With increasing

awareness of such “rights”, how can we expect improvements in productivity?

10. We did not have any specific reasons to be workaholics like in some Countries (Germany, Japan,

Israel, etc.) in certain periods in history.

11. The specific advantage of very little military spending for Japan and South Korea is not available for

us. For historical reasons and geographic location, we are forced to spend about 15 to 20% of our

annual Budget for military expenses, which is good for nothing, in terms of prosperity of people. It is

not likely to come down. On the Contrary, it is likely to go up since China has global ambitions and

we can not avoid following China, atleast at some distance, even if not at par.

12. The Political stability with a strong one Party majority rule without the hassles of coalition politics is a

prerequisite for the growth of any Country. With the ever growing clout of Regional Parties in India,

single Party majority rule seems to be a far cry in future, unless a Constitutional Amendment is

brought in whereby Regional Parties shall not be allowed to contest for Parliament elections.

13. There is complete lack of understanding among the Indian intelligentsia on one of the important

factors that need to be taken into consideration while evolving development plans. That is the

combination of the following three demographic factors:

a) Very high Total Population (Next only to China)

b) Very high population Density

c) Near uniform spread across the country.

Only India is unique in having all these three factors together. China is comparable to some extent.

But China has much lower population density and the spread across the nation is not that uniform.

Now without understanding this fundamental issue, we are trying to copy the economic models of

other countries, especially the city – centric economic models. This leads to very high per capita

expenditure for creating and maintaining public amenities like Roads, Train, Water supply, Sewerage

Management, Solid Waste Management, Health Care, etc.

Since we have endless supply of people from Villages / Towns, we can not accommodate all of them

in cities and create the basic amenities required for a healthy living. We have about 10 crore

people in our 320 Cities. Even if we are able to accommodate another 10 crore people assuming all

moving from Villages still we will be left with about 70 crore people in our Villages. Whereas in

European Countries where the population is hardly few crores, they can accommodate all of them in

few dozen Cities and provide all amenities.

Hence, we must stop further growth of those cities among the 320, which do not have the natural

resources nearby for supporting further population growth. Instead we shall encourage the growth of

about 10,000 small towns which have natural resources by creating public amenities, and

encouraging the industries / offices to come up in these towns. We must encourage well planned

multistory complexes with self contained waste management facilities to minimize pollution and land

usage.

Unfortunately, there seems to be no one who is looking at in this direction. Everyone is convinced of

the need for Desalination Plants, Over Bridges and Underground Metros for Cities. Simply they

don’t understand the fact that these plans call for huge investments and maintenance costs, which

can not be borne by the users, even though most of them belong to middle and upper middle class.

So, it is going to result in a huge subsidy outgo for the benefit of the affluent society. Then how will

government find funds for supporting the long term development plans for rest of the country?

What is more, these are not going to solve the problem of the Cities and in fact going to aggravate

the problem as more and more people will converge into the heart of the Cities.

This urbanization policy, if not corrected is going to have a retarding effect on our growth rate. It is

neither going to guarantee a healthy and satisfactory lifestyle for even the affluent city dwellers,

despite huge support from the Government.

14. Certain Welfare measures introduced with good intentions for the benefit of the lower strata of the

society have a detrimental effect on the long term growth prospects.

A few examples are,

a) The Mahathma Gandhi National Rural Employment Guarantee Programme

b) Free Ration entitlements.

c) Unemployment Doles, etc.

The Rural Employment guarantee programme has almost removed the availability of 3 crore able

bodied persons from agriculture and small industries / enterprises. This is having an adverse impact

on the overall economy. The quality of the long term assets which are supposed to be created

under this program are known to be not all that good. The productivity is far too low. These are to be

expected in such massive national level programs. After sometime, if we stop this program, people

will find it difficult to do hard work to give better productivity as they will be used to an easy life style.

The same thing is applicable for Free Ration entitlements and Unemployment Doles.

These literally kill the initiative for working to earn and stand on their own legs. When many around

you do the same, you don’t feel ashamed of living like a parasite.

So, these kind of welfare measures though seem to be right in the beginning will turn out to be a bad

prescription for both the beneficiaries and the Nation in the long run. Since we have already

launched many such schemes and there is clamor for introducing new schemes every year, it will

certainly pull down the long term growth prospects.

15. Forest Rights to Tribal People which is almost through, though looking noble from the perspective of

justice done to those persons who have been wronged for long years, it is not going to do anything

good, either for them or to the country. This is because, with this, they will be destined to live in

forests only with limited scope for further development. The mineral resources available in those

regions also can not be exploited for ever. With the result, the Nation as a whole will loose.

Instead of Forest Rights the Tribal people can be made as partners of development and moved out

of forest by making them shareholders and giving them employment. They can be brought to main

stream society and better standard of living can be provided to them. The forest can be preserved

with only judicious allotment of forest lands for unavoidable reasons.

The alternate route proposed above is not likely to be accepted at this stage and hence the fate of

most tribal people who constitute about 8% of Indian population is sealed within the boundaries of

forests. Along with that, the fate of some of the important projects which are in the fringe of these

forest areas are also sealed for ever. It is surprising to note that in the name of conservation and

freedom of people to choose their life, we want to keep some Tribals as “protected” and confine

them to the forests. Is it a right approach? Atleast if we give opportunity for them to mingle with

others, at some point they will come to mainstream society.

16. As part of accelerating the maturity of our Democracy, we have embarked on empowering the

citizens with sweeping powers like Right to Information Act, Right to decide on Development

Projects to Local Panchayats, Right to prosecute anyone (Lokpal), etc. All these look prima facie

grandiose and put Indian Democracy in the Top echelons in the league of nations. But the bottom

line will be slow down in the growth of Human Development Index (HDI). Though the Freedom of

expression, which is one of the parameters of development will go up, most of the remaining

parameters will come down, thereby pulling down the overall development of the masses.

For example in deciding a particular development project, supposing out of say 10 Panchayats

involved, one Panchayat does not give the consent. Is it justified to scrap the project? Also, the

decisions taken by Local Bodies, how informed and how justified they could be, in a complex outlook

from Social, Political, Technical, Economical, Environmental, and Sustainable stand points. Even

the Experts concerned are unable to strike a consensus and they go by majority opinion. Even court

judgments which are based on clearly written down Laws are based on simple numerical majority.

In such a situation, if we do not go by simple majority, the dictum of Democracy, and want to take on

board each and everyone or atleast want to take the consent of vast majority, say 80%, as proposed

in the Resettlement and Rehabilitation Act, then no development decision can be taken. It will lead

to stagnation.

Similarly in the name of strengthening Democracy by improving transparency in governance, we

have opened up a Pandora’s box in the form of RTI Act. Now anyone can get information on any

decision taken in the past and question its validity today. In the public, all can not appreciate the fact

that decisions are taken based on the limited time and limited data available at that time. The context

and prospects prevailing at that time could be entirely different from what they are today.

Also when collective decisions are taken, some would have agreed and some would have

disagreed. If all these information are made public then will it not create an impression as if there is

confusion and difference of opinion on anything and everything. Also the freedom of the decision

makers will be jeopardized.

With the result of all these issues, everyone will try to tread the best route, and that is avoid taking

decisions, keep quiet in meetings, and maintain status quo as far possible! Of late, that is what is

happening leading to indecisiveness everywhere.

17. There seems to be no reckoning of the fact that we are heading for another Foreign exchange crisis

with galloping import surges lead by Crude Oil imports. It is eating about 50% of our hard earned

foreign exchange.

There is an obvious alternate for Petroleum products in the form of Ethanol. We are least bothered

about it. We do not want to increase the purchase price of Ethanol from Rs. 27 per litre which is

there for few years now, even while the Crude price has nearly doubled in this period. No one really

knows why? Simply it is not there in the agenda.

Similarly the edible oil import is also growing at an alarming rate. But there is no major policy

intervention to boost the production of oil seeds.

We have enough opportunities to boost the production of both Sugarcane (for Ethanol) and oil seeds

(for Edible oil). Even if it takes some time to bring more areas under irrigation, we can scientifically

identify which areas are good for which crop and encourage those crops with suitable policy

interventions. For example the yield of Sugarcane in South India is exceptionally higher compared

to North India. So, we can minimize rice growth in South India and go for Sugarcane. Wheat can be

brought from North India and substituted for Rice, which also helps in balanced diet.

18. All countries which have grown faster than others have educated the boys and girls equally. More

importantly, the girls also have come out of the house and utilized their knowledge for the

development of their country. But in India, most of the girls, especially the upper middle class,

though get educated in professional colleges, utilizing the best of facilities offered by these Institutes

( both private and public), do not utilize their professional knowledge. After marriage majority of the

girls are confined to the house. Whether it is good or bad for a contended and happy social life for

the entire family is a different story. But it does not support the economic growth especially when

close to 50% of higher education seats are cornered by the girls.

To this extent, the growth rates of other countries can not be replicated.

19. Most of the countries which have grown faster than others have had political stability with mostly

single Party rule for long years. So, the decisions could be taken with long term growth of the nation

in mind, without the fear of losing elections. There was no need for populist policies.

Also decisions could be taken without much of opposition criticisms, even when some decisions

went wrong. Being single Party Governments, mostly with brutal majority, there was no need to

consult any Coalition Partners or Provincial Governments. In those days, the Provincial / State

Governments were not strong enough to question the Central / Federal Governments. Above all, in

those days, there were no media interferences in policy making or influence of media disclosures on

Parliamentary discussions in one way or the other. All these went well for quick decision making with

need for consultations with concerned experts / officials only.

But today, we need to consult Coalition Partners / Opposition Parties / Media / NGOs / Eminent

Citizens / Trade Unions / Caste Organisations / Regulatory Bodies / Industry Bodies / Agricultural

Associations, etc. Obviously, there will be no single decision which will be acceptable to all. It will be

a much delayed, mutilated, mixed and confused compromise formula, which will be naturally far from

what was originally drafted by the experts / officials / politicians concerned. It will be like too many

cooks spoiling the broth. The main point is that, the original draft would have been the handiwork of

the experts concerned and it would have given the right direction. Now, the final draft, in all

probabilities will be directionless !

In fact, the problem of Coalition politics is there throughout the world and it is one of the major

impediments for the economic growth of the world as a whole.

20. The influence of the media, especially the Television and Internet is all pervasive. These could

create visual sensations far and wide in short time. Right or wrong, it is almost impossible to take

decisions or give directions ignoring these media responses. Even Courts which are supposed to be

immune to such media responses are finding it difficult to keep away from the media influence. In

normal course, this should not be a bad idea.

But unfortunately, as a general rule, there is a general misconception among the media that the

public at large like to hear and see only the negative / exceptional / different / accidental / unique

events and opinions, which are obviously in minority, and not the positive / routine / useful /

developmental / generic events and opinions which are in majority.

The general public is also not able to appreciate the fact that, only the exceptional incidents and

opinions have news value for the media and not the general ones. Moreover, the media needs to

create some hype and exaggerate the events / discussions / opinions. Especially with the advent of

24 Hours News Channels, with the need for giving “Breaking News” every time, it has become

almost impossible for the media to run without creating some news with some controversy so that it

can be blown out of proportions and stretched till something else crops up.

With the bombardment of repeated negative news items and minority opinions, unknowingly the

people have become pessimistic and anti-establishment. They do not want to trust any Government

action, good or bad. In their views it is all malicious, wrong, unwanted, anti people and intended

purely for the benefit of the Politicians / Officials who initiate the action !

The fillip side of the coin is that, some of the TV Channels / Print media which are run by the Ruling

Political Parties give only the positive sides, with their share of exaggerations added, that their

credibility is totally lost.

Under these circumstances the Governments have to face a hostile media. There seems to be no

scope for any improvement in the near future. This will invariably put the governments on the

defensive all the while. With the result, on any policy matters, we will have one step forward and one

step backward, even if not two steps backward.

This is true in many of the countries throughout the world. In fact, this is one of the reasons why

there is complete dissatisfaction on all political parties. This has lead to the mushrooming of new

political parties with regional aspirations. So, no single Party could get majority. This has resulted in

Coalition Governments in many countries in recent years.

21. Some countries have had or still have some sort of Authoritarian Governments ( Military, Single

Party, Dictatorship, Royal, Judiciary, etc) in the initial phase of development. These include South

Korea, Singapore, Malaysia, Germany, Cuba, All Middle East Countries, etc. But we can never think

of anything near to such a situation until we get into Coalition mess consecutively for 3 or 4 times !

All these negative factors listed above put together will pull down the positive factors like High proportion of

young working age population, English Fluency among the younger generation, Political stability, reasonably

good climatic conditions, reasonably good rainfall, reasonably plain land suitable for agriculture, probability

for FDIs to come in chasing the burgeoning Middle class, etc, etc.

With the result, in my opinion, we can not aim for Double digit growth rates any longer, as China could do for

nearly 2 decades. The practical GDP Growth rates for the next five decades along with the projected

population growth rate and per capita GDP are given in the Table attached herewith.

If we have to target for the double digit growth rates, then all the aberrations mentioned above shall be

removed, the priorities shall be altered and political framework shall be modified as early as possible.

If we appreciate the validity of the above points in the right perspective and make amends on top priority, as

most of it are in our hands, we still have chance to improve our growth rates. Especially, if we can fill up the

market gap which is expected to be offered by China in the next few years due to tightening of the Pollution

Control Laws, HSE, Productivity decline due to affluence, new found Internet Freedom, etc. If we do not fill

up this gap it will be filled up by other emerging economies and we will be left behind once again. The FDI

will flow where there is visibility and to start with, this visibility comes from substantial export growth.

&&&&&&&

INDIA - PROJECTED GDP GROWTH

S. No

Year GDP PROJECTION Projected Annual

Population Growth Rate, %

Population, Crores

Projected per capita GDP, Rs

From To Avg. Growth Rate, %

From To From To From To

Rs.Cr. Rs.Cr.

1 2012 2022 7.0 8,500,000 16,721,000 1.25 122 138 69,672 121,046

2 2022 2032 6.0 16,721,000 29,945,000 1.00 138 153 121,046 196,246

3 2032 2042 5.0 29,945,000 48,777,000 0.65 153 163 196,246 299,608

4 2042 2052 4.0 48,777,000 72,202,000 0.35 163 169 299,608 428,266

5 2052 2062 3.5 72,202,000 101,848,000 0.20 169 172 428,266 592,161