We would think when the British Empire invade India it wouldn’t of improved India chances of becoming successful within the economy but now because of that India has one of the largest English speaking populations in the world. For labour intensive industries like call centres India is an obvious target for outsourcing. This is an economic development likely to continue in the future where many call centres will be relocated to India.
India has been forecasted positive growth at a sustainable rate of 8% until 2020. These factors (its favorable demographics, benefits from globalization and outsourcing and positive forecasts) putting India in the driving seat to potentially become a dominant figure in such an economically climate. Where the recession does not affect a country as they carry on producing growth rates of not just 1-4% which would be seen as remarkable at such time but of 8% is just extraordinary yet continuing such a efficient system where the economy will produce this every year could be seen as probable due to fact of India’s massive flaw which could affect such an economic dominance towards 2050.
However To maintain growth rates of 8-9% and prevent inflation and unemployment rising in the future there are various issues the Indian economy needs to address.
Firstly there quality of infrastructure as many areas of India are not well serviced, with poor transport links and a lack of energy supplies have also led to power shortages in certain areas. These problems are likely to continue espically with both a growing population and growing economy.
Secondly Environment cost due to India’s economic growth, The high economic growth has led to the middle class’s wealth to increase so they now have more disposable income who there for have benefited in terms of being able to buy more cars and consume more and more however this has led to increased problems of pollution and congestion.
Thirdly it needs to remove or reduce its barriers to entry. As the Indian economy is still highly regulated with costs and restrictions faced to business wishing to enter certain markets. This limits entrepreneurship.
Fourthly Unemployment could be a problem despite the fast growth of the economy. There is an increase in the number of people entering the Indian labour market, this may be difficult to provide sufficient jobs unless ther is more investment continues in manufacturing and the service sector
Fifthly there is a massive skill shortage in the I.T sector similar to Chinas shortages of accountants. It is not due to the fact that India can’t produce such skills as their education system is seen as very good but maybe due to the fact There is a growing gap between rich and poor in different areas of the country. So There is need to increase both academic and vocational skills to a broader section of the population not in just one particular area.
Finally a large % of the India’s agriculture is still dependent on the monsoon season and there for they would need to heavily invest in its irrigation and water supplies to continue an average % as at the moment it is fluctuating from 1%-9%.
