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India as a future super power: conjectures and refutations.

Abstract

This long paper is an exercise in serious soul searching on the part of the authors who use the positivist mindset of a political economist. It begins with painting the background under which the new regime of liberalization, privatization and globalization unfolded. It then proceeds to define globalization realizing that this not very often done. The paper then posits the socialistic view on globalization and then goes on to mention contradictions in the Indian political economy. The paper sets out to argue why globalization was inevitable under the unicentric capitalist world economy and the change of economic focus on the part of planners. Given the indubitable nature of this change of perspective from a relatively centrally planned economy to a relatively free market one, the paper argues that the process of globalization should be accompanied by a process of liberalization. And, the paper lays down the great strides made by India in spite of many contradictions, scandals and frauds to emerge as a global power in 2011.

THE BACKGROUND

Winds of change, over the last two decades or so, have swept the economy and the polity of India. The country, under the guidance of two learned economists, Manmohan Singh and Montek Singh Ahluwalia, had under Narsimha Rao moved towards a free market economy. Old rules of the game have been discarded and new rules have been made. Old citadels of power slowly and grudgingly made way for the new barons to take charge. The Nehruvian concept of a socialistic pattern of society, (whatever that meant), was replaced by an IMF influenced liberalization policy. Indian economics underwent cataclysmic, albeit at times cosmetic, changes. It is in this climate of change that the paper seeks to look at the phenomenon of globalization and what it may mean for the future of our economy in general. The paper champions no cause nor does it wave any manifesto. All that is attempted is a re-examination of a particular aspect of objective social reality. This could be viewed as a brief polemic, which presents an alternative paradigm. The position taken is based on the author's viewpoint and supported by sufficient evidence should the reader wish to delve deep into the established sources of empirical data, some of which have been cited at the end of this paper.

India was teetering on the verge of bankruptcy largely due macroeconomic misadministration of three successive governments at the Center which had also written off large agricultural loans in exchange of the vote bank. As India received a US $7 billion bailout from the IMF and the World Bank, it was clear that the donors would impose certain conditionalities. One such was the liberalization of the economy and decontrolling the market mechanism. The prime mover of this capital restructuring process was none other than the former don, an esteemed economist and Professor of the Delhi School of Economics, Manmohan Singh who rose to become India's Prime Minister and .Sonia Gandhi's public mascot. He has been simultaneously, hailed as a hero and derided as a Quisling by persons from different sides of the ideological spectrum. Whatever the verdict of history might be, the good professor has created quite a ripple, which is fast becoming a tidal wave. It is also a fait acompli and it is going to be almost impossible to spin back the wheel of time. But let that rest. A significant phenomenon, fast on the heels of the liberalization process of the Indian economy, was the spate of mergers and strategic alliances between a select band of Indian corporate giants and their overseas counterparts. The Liberal Economists and others of similar persuasions saw such strategic alliances as merely a transformation of the market structure, from one of monopolistic competition to that of oligopoly and duopoly. There was, however, more of it than what meets the eye. What, is argued, as taking place is the concentration and centralization of capital in Indian industry. This process has wider implications both for the polity and the economy than is immediately observable. It would appear that Indian industry; especially since 2005 when it entered the WTO Regime is fast finding a new equilibrium in conditions of uncertainty, and amidst dynamic changes within and between the relations of production with the very nature of capital.

THE GREAT CONTRADICTION

Writing in 2009 Sadri in his polemical paper "Hegel Would Have Danced with Glee" had pointed out that two devout Christian scholars have charted two separate paths to arrive at logical solutions. The first, (we will consider), is Rene' Descartes, a mathematician by training, and as we all know, gave the first formal proof of logic in his masterpiece The Meditations. Aiming to reach totally secure foundations for knowledge, he began to attack all his erstwhile beliefs with sceptical doubts. What was left was the certainty of his conscious experience and with it of his (own) existence. He posited a form of linear reasoning, which began, with a set of syllogisms ending in a conclusion, the whole of which being called an argument. Basically, a syllogism is a form of reasoning wherein a conclusion is drawn from two given or assumed propositions (premises). He stated that a middle or common term is present in both premises and it may even be invalid and is not present in the conclusion. He began by stating dubito ergo sum, (I doubt therefore I am) since the beginning of all inquiry and hence knowledge is doubt. He went on to posit his famous cogito ergo sum, (I think therefore I am), since our consciousness and self-realisation determines who (we see) we are. He ends his thoughts with sum res cogitans, (I am a thinking being), thus justifying the veracity of his argument. In mathematics an argument is an independent variable determining the value of a function. For Descartes it symbolised either a reason advanced or the reasoning process itself.

The moral brigade in India (unwittingly and invariably) uses the Cartesian argument. The proponents doubt the bonafides of a given action or scholarship think and believe that their own position or interpretation is correct and justify it by saying "we are right" as the religion or the custom or the belief system has (somehow) ordained us to say so. 'The hell with freedom of thought guaranteed by the Constitution; if we do not like it we shall create a ruckus and the docile / insecure / accommodative government will fearfully ban it.' Salman Rushdie suffered in Satanic Verses because some clerics misunderstood his brilliantly authored book and the Government of India did not want to rock the vote bank and taking the lead promptly banned it. David Laine and the Bhandarkar Oriental Research Institute (BORI) suffered a similar fate at the hands of the moral brigade for Sivaji: Hindu King in Islamic India more recently. To secure the vote bank, the Maharashtra Government raised its ante and banned the book ex post facto. Years ago Dom Moraes could not publish his book since it carried a picture of the Parsee Tower of Silence and the self styled interpreters of Zoroastrianism made quite a song and dance about it. Thank heavens people like Prahalad Kakkar and Soli Sorabjee stood up and the Indian judiciary did not let the cause of scholarship down this time around. Fatwas of course will come thick and fast from the disgruntled moral brigade on all sides of the ideological spectrum (mostly from the right wing, the conservatives and the clergy). The level of social consciousness of the populace will no doubt determine the efficacy of these fatwas.

The not so recent craze was Mandira Bedi's sari flaunting the national tricolour below the knee! In other countries people use the national flag as a bikini. Are these foreigners any less patriotic or are they being disrespectful to their country or their flag? I seriously doubt it. Then why is all this brouhaha I wonder. Is it the moral brigade in a political garb that we see? All I have to tell those "whose sentiments were hurt" by the lady's sari is: for Heaven's sake please leave that lady alone! Concentrate on more important social issues like unequal distribution of wealthand incomes or the uneven development of communities and sectors. And if you feel that Indian (Hindu) culture is not liberated enough please start either wearing a burkha or visit Khajurao temples. In either case you will (hopefully) learn something about your own self.

Now we come to Georg Frederick Wilhelm Hegel (probably) the greatest German philosopher who walked the face of the earth. Immanuel Kant had in his masterpiece Critique of Pure Reason, and then in Critique of Practical Reason attempted to classify the world leaving behind an essential dualism (a) nature opposed to spirit (b) object opposed to, and (c) the outer world composed of isolated unrelated substances. He created the real world where he placed human beings and the metaphysical world where he relegated God. It fell to Hegel's lot to reduce this duality to unity and he did this with majestic scholarship in The Philosophy of History. He posited a broad doctrine of freedom and saw two tendencies co-existing within objective social reality. Hegel saw this freedom through (a) unity of opposites (man usually marries a woman, a beautiful lotus blossoms in a dirty pond) and (b) viewed reality through contradictions (some are fair as others are dark; some are beautiful as others are ugly and some are tall as others are short). He consequently developed the dialectic further. The fact that the great Karl Max found Hegel standing on his head and proceeded to put him back on his feet is another matter altogether, so we shall pass it by.

Hegel's logic or dialectic was fundamentally circular in contradistinction of Descarte's linear argument. The original thought was an idea, the most powerful thing (taking the queue from Voltaire). The opposition to it, as Hegel argued in Phenomenology was natural and finally (he prophesied) there would be a conclusion that is socially acceptable. In time this socially acceptable view would generate its own opposition and the cycle of thought (and action) would continue. Man, (the Bible says), was made in the image of God so for Hegel man was the original idea or thesis. Communal strife (man abusing his wife, wife beating the child, the child kicking the dog and the dog biting the neighbour) was the form which opposition to the original idea took and this was antithesis. This community had to be managed and Hegel's answer was the modern republic, the ultimate perfection that was his synthesis. As explained above, the thesis-antithesis-synthesis was a perpetual and cyclical phenomenon. We cannot forget that the republic of Thomas Hobbes was replaced by Abraham Lincoln's democracy.

Democracy has been famously defined by Lincoln at the Address given at the Gettysburg War Cemetery as the 'government of the people by the people and for the people'. In a retarded peripheral capitalist economy we need to ask 'which people"? This is because practicing democracy on an empty mind and an empty stomach, (and we have plenty of those), is often an unrealistic ask.

Let us now take the Indian Constitution that is the foundation stone for our democracy, the rights of man and the division of powers, as a case in point. Our Constitution is a truly brilliant set of ideas, systems and procedures with commiserating rights and duties, conceived by great minds like Bhim Rao Ambedkar and Bhulabhai Desai. Hallowed ideas were shelved in the name of political expediency when lesser mortals became lawmakers. Unwittingly and ill advisably successive political leaders have used it to create a micro-nationalism through the linguistic division of states and a macro-racism though a perpetual reservation policy. Be that as it may, the separation of powers between legislature executive and judiciary, though often brittle, is still holding out admirably. (The era of emergency under Indira Gandhi was an unfortunate aberration and can be safely left out of this brief argument). Corruption, (defined as a deviation from the accepted norm), has not blunted the society entirely and we still have a few good men around who can and do make the difference.

However let us not forget that the Constitution also creates a unity of opposites by bringing all religions under the banner of secularism. Yet it sees reality in contradictions, when sixty years after we gained our political independence, we still have a religion and caste based (rather than income based) reservation-quota policy! It is bemusing that politicians defend this while laying claim to secularism. Hence the first part of the Hegelian vision is actualised.

Now we come to the Hegelian dialectic of thesis-antithesis-synthesis. It is well known that political, social, cultural and economic decisions are taken with the vote bank in mind. Common good and with it the common man is sidelined at best and his interests are consigned into the trashcan of social history at worst. The thesis prior to 1945 was a unified India, which we now call the Indian sub-continent. The antithesis after 1947 saw the creation of India and Pakistan from the earlier geophysical mass. This antithesis continued up until 1971 when Bangladesh was created and liberated from Pakistan. Then we had the synthesis, with the creation of the ASEAN.

How long and how well this new synthesis will last is moot point. I opine with the benefit of foresight, that what happened in 1947 and the resultant disintegration of an undivided India in the light of what is happening today was a good thing after all. Beginning with Jawaharlal Nehru and the eviction of Kashmiri Hindus from the homeland, the policy of appeasement has continued unabated reaching ridiculous heights. What is happening, for instance, in Uttar Pradesh is alarming. Some still want to be treated as minority in spite of the growing numbers and demographic volumes while laying claim to secularism in the same breath.

DESPITE CONTRADICTIONS

They say one has to view Indian economy and its polity to believe in God since both defy logic. This is what happened in 2010. Goldman Sachs states in its report Brazil, Russia, India and China -A Road in 2050 as follows: If everything goes smoothly, these four countries will become the most attractive region in the world for placing direct as well as portfolio investment,

In 2003 Goldman Sachs made a prediction that India would emerge an economic super power by 2050 this prediction is reproduced below

DREAMING WITH BRICS: THE PATH TO 2050

Global investment banking and securities firm Goldman Sachs says in the report that by 2050 China, Brazil, Russia and India will be ahead of the six largest industrial states in overall GDP.

* Over the next 50 years, Brazil, Russia, India and China--the BRIC seconomies--could become a much larger force in the world economy. We map out GDP growth, income per capita and currency movements in the BRICs economies until 2050.

* The results are startling. If things go right, in less than 40 years, the BRICs economies together could be larger than the G6 in US dollar terms. By 2025 they could account for over half the size of the G6. Of the current G6, only the US and Japan may be among the six largest economies in US dollar terms in 2050.

* The list of the world's ten largest economies may look quite different in 2050. The largest economies in the world (by GDP) may no longer be the richest (by income per capita), making strategic choices for firms more complex.

We are now in the year 2011 and are better poised to answer the following question. Is it possible for India to become an economic super power by 2050 as per the prediction above and if so why? This paper (at this point) begins by answering the question in the affirmative and proceeds to reason why.

It is in this context, the paper pursues this from two different perspectives viz.:

* India as an economic superpower

* India as a knowledge superpower

OUR ACADEMIC POSITION

The paper now looks at these different dimensions and tries to arrive at the conclusion that India can emerge as a super--power

When we dream of India becoming a super power by 2050, we believe that analysts have to look at four different aspects: (a) Economic growth (b) Competitive advantages. (c) People, (d) Ability to sustain and improve on these over very long periods of time in the future.

Growth is nothing but an annual increase in net national Product and NNP= GNP minus depreciation. It is a statistical construct.

Development is calculated as an annual increase in the per capita productivity of labour without a fall in the aggregate rate of employment. It is concerned with the quality of life.

We posit that India has registered development-less-growth since our civic consciousness remains at quite low levels.

Hence the rest of this paper that is concerned with India becoming a global power and realising Goldman Sachs' prediction is concerned with economic growth and not economic development. That is a caveat we shall hold on to in reasoning the causes which can make India a super power the above have been considered in this paper.

THROUGH THE PAGES OF HISTORY

Economic historians will tell us that India economic was a super power in the past, has turned into developing nation in the present,and holds promise of becoming an economic super power of the future Indeed, it was India that gave the world the concepts of Zero and the decimal System that was taken to the world by Arab traders in the 4th century. Hence globalisation began then and is nothing new. Private entrepreneurs made inroads in the 3rd millennium BC, the Indus-Saraswati civilization when India was the world leader in science and technology as well as in trade and philosophy India has a glorious past indeed in the 16th and 17th century and during the beginning of the British rule it was considered one of the top economies of the world. The Great Zomorin welcoming the Portugese in Calicut was proof that liberalisation was already here. Hence privatisation again is nothing new as the modern nets would have us believe.

One estimate puts the revenue of Akbar's Mughal Empire in 1600 at 17.5 million [pounds sterling], in contrast with the total revenue of Great Britain in 1800, which totalled 16 million [pounds sterling]. An estimate by Cambridge University historian Angus Maddison reveals that India's share of the world income fell from 22.6% in 1700, comparable to Europe's share of 23.3%, to a low of 3.8% in 1952 from where India's economy started declining well up to the 90's.

Since 1990 India has emerged as one of the wealthiest economies in the developing world; during this period, the economy has grown constantly, but with a few major setbacks. This has been accompanied by increases in life expectancy, literacy rates and food security.

In 2003, Goldman Sachs had predicted that India's GDP in current prices will overtake France and Italy by 2020, Germany, UK and Russia by 2025 and Japan by 2035. By 2035, it is projected to be the third largest economy of the world, We are witnessing a return to India's glorious past without a shadow of doubt, We are the world' largest democracy, we are secular and the army has not come out of the barracks since 1947 (unlike our neighbours).

The following quote of former UN Secretary General Boutros Boutros Ghali is relevant "In the next 25 years, we will have new important states, among them new super powers India, China, Russia, USA and European Union. This will help in democratization of the Council, Ghali said without the political will of the member states it would not be possible to achieve. "The extension of the Security Council is something positive and again it depends on what will be the direction of countries like India or will they accept to have a permanent seat without the veto, observing that unilateral decisions have created crisis for the UN, he said the new world order might help making the body a more democratic one".

In fact the latest Central Intelligence Agency report from USA mentions that India will be a super power by 2020. This surely is a mind opener even without debate as to how much of it is true and it should prompt introspection. The CIA's aim is to prepare the US for future economic challenges from China and India.

INDIA AS AN ECONOMIC SUPER POWER

The Economic Front: The Economic Survey pre budget 2011 said India has the fourth largest foreign exchange reserves, which helped the nation to tide over global financial crisis. India's foreign exchange reserves touched $297.3 billion in December, 2010 from $279.1 billion in March. The Indian government is the fifth most powerful in the world in terms of its ability to project the economy in the global sphere, as per a new ranking of 112 governments released as part of the Economic Survey 2010-11. As per the Index of Government Economic Power (IGEP), India's economic power has increased substantially in the nine year period. It moved to the fifth spot in 2009 from a ranking of 10 in 2000. According to the IGEP 2009, the US was at the top of the list, followed by China, Japan, Germany, India, Russia, Brazil, France, Italy and the UK. The four variables on which India shines are Government revenues, foreign currency reserves, export of goods and services and human capital.

Let us substantiate this with some Facts and figures In 2003 Goldman Sachs a leading financial services firm in USA and one of the largest in the world shocked one and all when it brought out its famous report on the BRIC economies predicting that they would be the economic super powers of the world the report said

* Over the next 50 years, Brazil, Russia, India and China--the BRICs economies--could become a much larger force in the world economy. Using the latest demographic projections and a model of capitalaccumulation and productivity growth, we map out GDP growth, income per capita and currency movements in the BRICs economies until 2050.

* The list of the world's ten largest economies may look quite different in 2050. The largest economies in the world (by GDP) may no longer be the richest (by income per capita), making strategic choices for firms more complex.

The following data has been projected by the report in the year 2003

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Let us now examine the projections for India as per the report given in 2003 .India has the potential to show the fastest growth over the next 30 and 50 years. Growth could be higher than 5% over the next 30 years and close to 5% as late as 2050 if development proceeds successfully.

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The estimates are based on a healthy growth rate of 5 to 6% We are now in the year 2011 let us see how India as grown visa vis its GDP we take data from three different sources

INDIA GDP--REAL GROWTH RATE
As per research done by the CIA in USA the data is as follows

         GDP--real          Percent      Date of
Year   growth rate   Rank    Change   Information

2003         4.30%     54               2002 est.
2004         8.30%     16    93.02%     2003 est.
2005         6.20%     43   -25.30%     2004 est.
2006         8.40%     24    35.48%     2005 est.
2007         9.20%     23     9.52%     2006 est.
2008         9.00%     23    -2.17%     2007 est.
2009         7.40%     28   -17.78%     2008 est.
2010         7.40%     10     0.00%     2009 est.
2011         8.30%     10    12.16%     2010 est.

Source: CIA World Factbook--


The growth from 2003 is very much in line with the report and so far exceeds 5% so it can well be said that India is on the growth path as predicted by the report.

Let us take note at this point that debate continues around growth giving development a miss. India continues to be the home of the largest poor, we continue to be narrow minded in terms of custom and tradition and allow pundits, priests, dastoors and mullahs tell us what to do and what not to do as if they have a divine franchise to do so. The Indian Government since 1991 has been ranting about inflation but is alarmingly silent about unemployment which is the greater social evil a la Keynes. God men of various shapes, sizes and denominations the country, superstition is rife and the metaphysics of spirituality has been replaced by the ritual of religion. The caveat of development-less-growth remains in tact!.

Now let us see the charts given below

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As per CMEI

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As per the IMFNominal GDP growth is

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India's GDP is projected to continue to grow at a brisk pace of 8.8% in 2011-12 (FY 12), The domestic environment is conducive for growth and private final consumption expenditure is projected to grow by a healthy 7.5% and gross fixed capital formation by 14.6%, the Centre for Monitoring Indian Economy (CMIE) said in its latest monthly review of the country's economy.

The statistics above taken from three different sources clearly substantiates the prediction of Goldman Sachs that India will be a future economic superpower. The growth from 2003 is very much in line with the report and so far exceeds 5% so it can well be said that India is on the growth path as predicted by the report.

The Knowledge Perspective: Now let us examine some other indicators The Fortune 2000 and 500 lists in 2003 stated that twenty Indian companies, including State Bank, Reliance Industries Indian Oil and Oil and Natural Gas, make to the Forbes list of top 2000 companies worldwide for 2003. Indian Oil Corporation was named as the only Indian firm in a Fortune 500 list of global companies.

The fortune 2000 and 500 list in 2010 stated that fifty six Indian companies have been listed in the Forbes Global 2000 ranking for 2010 The leading companies include those 8 mentioned above a jump of 36 companies.Eight Indian companies, including oil major Indian Oil Corporation and Mukesh Ambani-led Reliance Industries, have made the cut in the list of the world's 500 largest companies compiled by Fortune. This shows a increase of 7 more companies since 2003.

This also indicates India's growing economic might which is increasing year by year. In 2009 there were 47 companies and in 2010 there were 56 indicating that many companies are poised to join this elite club.

Indian Multinationals: Prior to 2003 it would be unheard of to consider any Indian company as a multinational having some kind of presence abroad. Many Indian firms have slowly and surely embarked on the global path and lead to the emergence of the Indian multinational companies.

With each passing day, Indian businesses are acquiring companies abroad, setting up units and offices abroad, hiring foreign staff and making India's presence felt. Companies like TATA, Birla's ,Reliance, Infosys , TCS have a strong global presence other smaqller companies like Ranbaxy, Asian Paints, Sundaram Fasteners are not lagging behind.

To illustrate this we take two small cases

The first is the case of TCS in June 2004. About 80 percent of revenues for Tata Consultancy Services comes from outside India In June 2004 it raised Rs 54.2 billion ($1.17 billion) in Asia's second-biggest tech IPO this year and India's largest IPO ever till 2004. This was surpassed by the Coal India IPO in 2010.

The second is the case of TATA, Corus. On 20 October 2006 the board of directors of Anglo-Dutch steelmaker Corus accepted a $7.6 billion takeover bid from Tara Steel, the Indian steel company. The following months saw a lot of negotiations from both sides of the deal. Tara Steel's bid to acquire Corus Group was challenged by CSN, the Brazilian steel maker. Finally, on January 30, 2007, Tata Steel purchased a 100% stake in the Corus Group at 608 pence per share in an all cash deal, cumulatively valued at USD 12.04 Billion. The deal is the largest Indian takeover of a foreign company and made Tata Steel the world's fifth-largest steel group.

Based on the reasoning given above, we can confidently say that India is indeed set to be a economic power but there is another side to this India besides being an economic power has also the potential to be a knowledge super power.

Another aspect to boost this presumption is that India has been relatively unscathed by the global recession which started in 2008 and has maintained a healthy growth rate.

India as a Knowledge Super Power and the accompanying Competitive Advantageare sine qua non and no longer open to debate in sheer growth terms. Rising educational standards, the entry of foreign universities and the reverse Diaspora of Indian brains working abroad are sentinels that herald the growth we allude to.

Today is the 21st century and it is known as the Age of the Intellect where the proletariat is being replaced by the knowledge worker as the vanguard of social change. The knowledge worker is focused on the following

* IT, Media, and communications

* Life sciences

To quote our illustrious former President, APJ Abdul Kalam "The nation can use its core competence in IT, natural resources and human resources to become knowledge super-power by 2020. The 21st century belongs to the knowledge age, where acquisition, possession and application of knowledge are the most important resources."

India can indeed be a super power not in terms of military might but in terms of knowledge. The authors are in agreement with Abdul kalam who had argued that

In the 21st century, knowledge is the primary production resource and it will be used as a tool to drive societal transformation and create wealth.

Knowledge has always been the prime mover of prosperity an power. The acquisition of knowledge has therefore been the thrust area throughout the world, and knowledge society can be the foundation for building a developed India.

During the last few centuries, the world has undergone several social transformations. First there was an agricultural society where manual labour was the key factor and economic growth was dependent largely on agricultural products. With the advent of the industrial revolution, economic progress was propelled largely by technological development leading to machines replacing human resources.

India could not fully reap the results of the industrial revolution as the nation was ruled by foreign powers. However, licensed industrial institutions did emerge. This society added value to its products through explicit knowledge, which is technology, to produce industrial products that led to the economic growth of nations. Thus management of technology, capital, and labour provided the competitive advantage to bring about this transformation in economic growth.

The world today has already moved into an information society. This society derives its economic growth by further value addition to the explicit knowledge through networking. Connectivity and software products are now driving the economies of the nations. While tomorrow's world would be one that would recognize knowledge in its most comprehensive form and add further value to products through innovative knowledge--intensive products / services in a networked ambience. It is these knowledge products that will contribute to the economic growth of nations.

The knowledge industries where India is already shining are:: (a) IT Software and IT enabled services, including BPOs. (b) Entertainment and media (c) Biotechnology. (d) Pharmaceutical and (e) Health Services

Besides, the above India will do very well in the following sector, which also has substantial involvement of knowledge. (i) Auto components (ii) Renewable Energy (iii) IT Industry and (iv) Education. However for education to flourish the mindset must change and we must stop becoming a sausage factory and raise both our critical consciousness and our quality standards.

According to NASSCOM, (National Association of Software and Services Companies), India's apex software industry body, BPO and ITexport revenues for India were $59 billion last year, the industry is estimated to have grown by 19 per cent in this financial year 2011, aggregating revenues worth $76 billion.

Indian information technology (IT) and business process outsourcing (BPO) exports are expected to grow three-fold to $175 billion in revenues by the end of this decade., close to a million people in India are building rewarding careers with the BPO industry.

In India BPO workers are comparatively better paid than other industrial sectors. The monthly salary of BPO workers ranges from Rs. (Indian rupees) 8,000 to Rs. 30,000 or more According to NASSCOM.
   The only constrain to tap this opportunity is not the demand but
   our ability to address it," said, Nasscom President Som Mittal.
   With presence in 52 countries, 200 cities, 400 delivery centres, 10
   companies listed on overseas stock exchanges, and 400 of the
   Fortune 500 firms being the customers, Indian firms are certainly
   multinational," said Mittal. With India's share in the global
   sourcing market touching 55 per cent in 2010, the success of its
   business model is clearly established


INDIAN PHARMA INDUSTRY

According to a report of the Organisation of Pharmaceutical Producers of India (OPPI), Indian Pharmaceutical industry dividing has four components Contract Research, Bulk Drug Exports, Formulation Exports, Domestic Formulations. Domestic formulation occupies the biggest pie among the four and going by the estimates, it will continue to do so in the next few years. Domestic Formulation Industry is likely to grow from under USD 10 Billion(estimate) in 2009 to USD 21.5 Billion in 2015. Indian Bulk drug exports is estimated to be in the range of USD 12.5 Billion by 2015. With significant cost advantages and quality consciousness in the Indian manufacturing, at least 25% of this Bulk drug exports will be contributed by contract manufacturing done for global giants. India's increased credibility as a base for clinical trials, more and more of global outsourced contract research and development projects are estimated to come our way. This industry is estimated to be worth USD 3 billion by 2015. Overall it's going to be a USD 50 billion industry by 2015. Hence visionary universities are starting and developing Pharmacy since through patents it is a great money spinner and also gives us a competitive edge.

AUTO ANCILLARY

A Whole New world according to a report by Dhanalaxmi bank is emerging. As of 2009-10, the auto ancillary industry employs close to 9.2 lakh people and contributes 2.1% to India's GDP. It is one of the sunrise industries of India with immense growth potential. From a modest supplier to the domestic market, it has evolved into one of Asia's key auto components sources. Currently, India is seen as an important participant in the global automotive supply chain. It is a supplier of a variety of high value and critical auto components to foreign automobile makers such as Ford, Volks-wagen, Toyota and General Motors.

The biggest players of the India auto ancillary industry are Bosch, Motherson Sumi Systems and Bharat Forge. Others include Amtek Auto, Sundaram Fasteners and Subros. As per the Automotive Components Manufacturers Association of India (ACMA), the sector garnered a turn-over of $22 billion in 2009-10, at a CAGR of 21%.

Exports also grew at a CAGR of 21% over the past seven years to reach $4 billion in 2009-10. Europe ac-counted for 37% of total Indian exports, followed by Asia at 28%, North America at 24%, Africa at 7%, South America at 2.5% and Australia at 1%. It is a fact that India is one of the world's most competitive auto component makers. It is also gradually turning into a global R&D hub, where MNCs such as Suzuki, Daimler Chrysler, Bosch and Johnson Controls have set up development centres. International auto component compa-nies such as Delphi, Bosch, Visteon and Meritor too have set up operations in India. Besides, automakers such as Ford, Toyota and General Motors and many auto component makers themselves have set up their international purchasing offices (IPOs) to feed their global operations.

It is clear that global automakers are increasingly using Indian components in their units so as to remain cost competitive. This augurs well for the industry.In recent years, there has been a small chorus of voices promoting the notion that India is an IT Super--Power. Not only has this been touted by a section of the Indian Press, but it has also found an echo in the writings and statements of Indian NRIs. Undoubtedly, India's progress in the field of Computer Science has been quite remarkable. The reputation of India's best IT professionals is entirely well-deserved, and Indian researchers have been publishing some of the best papers in the field.

Moreover, according to a recent article in Forbes magazine India's intellectual acumen has now drawn 150 global business giants to set up research and development facilities in India. Not only does the list include important technology companies such as IBM; HP, Texas Instruments, Motorola, Samsung, ST Micro and Infineon, but also large manufacturing companies such as GE, Daimler Chrysler Tyco Corp, and Electrolux.

Although not all of these R&D facilities are working at the cutting edge of technology, several of these centers are critical to the success of the parent company. For instance Intel's India Research Center filed 63 patents in the past year, and has now emerged as Intel's most significant internationalcenter, edging out counterparts in Malaysia and Israel. Guillermo Wille, head of GE's India Research center has noted that GE's Indian scientists and engineers are working in leading edge fields such as nanotechnology, hydrogen energy, photonics, and advanced propulsion. And in the ultimate compliment to Indian talent, Oracle co-president Charles Phillip said recently: "The kind of intellectual figure you people have is phenomenal....".

This clearly indicates that India is not only becoming an economic super power but also poised to be the knowledge capital of the world, both in terms of People and Indian demographics.

RIDING THE DEMOGRAPHIC WAVE

Demographics play an important role in the way the world will change and this is also is factored into the prediction of Goldman SachsAs per 2011 census India is the second most populous country in the world, with over 1.21 billion people (2011 census), more than a sixth of the world's population. Already containing 17.5% of the world's population, India is projected to be the world's most populous country by 2025,

India has more than 50% of its population below the age of 25 and more than 65% hovers below the age of 35. It is expected that, in 2020, the average age of an Indian will be 29 years, compared to 37 for China and 48 for Japan the literacy level is male 73.4% and females 47.8% (2001 census) which is likely to improve.

There is likely to be a large population of young people with aspirations of a better lifestyle. There would be a large reservoir of literate and skilled persons. There is also a greater likelihood of more women taking part in direct economic activities including entrepreneurship.

The IT sector is estimated to employ 183000 skilled candidates (engineers and science graduates) in 2011. This is another powerful force that will propel India to power status.

ABILITY TO SUSTAIN AND IMPROVE

To conclude, there is no doubt that in terms of economic growth India has emerged as one of the global leaders. The following points are germane to our position.

* The evolution of India as a superpower in 2020 presupposes rapid economic growth in the intervening period. If the nation has to reach the status, then the rate of growth would necessarily have to be 8-10 per cent per annum.

* The authors of the report acknowledge that the projections about the new economic powers aren't sure things, particularly because they assume the removal of a good number of political and structural barriers.

* And indeed, they point out, it's well to remember that economic predictions frequently go awry. In the 1980s, Japan--which later began floundering in a lengthy deflationary spiral that may still not have concluded--was being trumpeted by some forecasters as the nation that would overtake the US by now

* Rapid economic growth of the past decade has ensured India a place among the top 10 movers on GDP growth, but the country ranks a low 119 among 169 countries on the 2010 Human Development Index. China has been ranked much higher at 89 on the index published annually by the United Nations Development program. And the reasons should be obvious. India compares very poorly with countries with high level of human development on all indicators such as life expectancy, education and per capita income. For instance, life expectancy at birth is 64.4 years in India. In comparison, people living in countries such as Norway, Australia, New Zealand and many countries across Europe are expected to live beyond 80 years. The world average is 69.3 years. The Chinese are expected to live about 73.5 years. Similarly, the number of years a person has spent in school is a dismal 4.4 years for India as compared to global average of 7.4 and 4.6 for South Asia. The latest Human Development Report (HDR) has also tried to look deeper into the indicators to establish various inequalities. These inequalities arise due to disparity in distribution of incomes, gender inequality, and multi dimensional poverty.

* Corruption is a major issue India has been ranked a lowly 74, two steps down since last year, among 180 countries of the world on the worldwide Corruption Perceptions Index (CPI), prepared by independent international agency Transparency International year 2010. The consolation is that China which was ranked a joint 72 with India in 2007 slides a step down to occupy a place above its neighbour this year In equal distribution of wealth.

* According to the Economic Freedom of the World report, from 1980 to 2008 China rose from the 87th percentile to the 67th percentile, while India dropped from the 56th to the 67th. In the most recent rating (for 2008) India ranked no higher than 42 out of the 141 nations covered in eight major categories; it came in at 123 and 124 in business regulation and credit market regulation, respectively. New Delhi's ratings actually have fallen marginally since 2005. Overall, India came in at number 87 (compared to the U.S. at number six).

India has too much politics with its economics and too little economics with its politics. We as a people follow well but we are still looking for real leaders. The real challenge before India is to bring about greater and more egalitarian socio-economic development alongside of a rise of politico-civic consciousness, We have a long way to go before we become the best, but we can achieve this target provided we stay focused, think big and execute our projects on time. The question remains whether our leaders can stop placing the cart before the horse and stop throwing babies out with the bathwater.

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SORAB SADRI, Director, Institute of Mgmt, Baddi Univ of Emerging Sciences and Technology. Makhnumajra. Dist: Solan, Himachal Pradesh, E-mail: sorab.sadri2010@gmail.com

SHARUKH TARA, Professor of Finance, Bharati Vidyapeeth Institute of Management Studies and Research, Navi Mumbai 400612, E-mail: sharukh_tara@rediffmail.cora

D.Y. PATIL, Director of Bharati Vidyapeeth Institute of Management Studies and Research, Navi Mmubai 400612, E-mail: director@bvirasr.com
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