Taking Responsibility for India’s Future
by Helen Sanders, Editor
Talk of the ‘BRIC’ countries, an acronym much loved during the early noughties, is now all but dead. Indeed, it seems incongruous, even absurd to try to generalise about four countries whose cultures, politics and economies are so different. With its newly awarded second place on the economic leader-board, China now tends to dominate discussions on economic growth in major ‘emerging’ economies. Indeed, were it not for the significant imbalances that remain, there is little justification for referring to China in this way.What the focus on China tends to obscure, however, is the largely untapped potential that exists in India. With the world’s second largest population (four times greater than the United States) and the seventh fastest growing economy in the world, it would be a travesty for multinational corporations to ignore India, or to sideline the country by giving preference to its eastern neighbour.
Comparisons with China
Despite ‘BRIC’ becoming an anachronism, India is still frequently compared to China, and this comparison is often unfavourable. I visited India for the first time late last year from China. Based on my brief and subjective experience, I can only conclude that anyone trying to make such a comparison has never been to both countries. Perhaps the only common factors I would identify are the huge numbers of people, bicycles and cars. Beyond that, two countries could hardly be more different. India was, for me, a country dominated by contrasts: faded colonial buildings and dirty streets juxtaposed with colourful decorations and clothing; the happiest, friendliest people I have ever met enduring grinding poverty; enthusiasm and motivation combined with a consciousness of community responsibility. India undoubtedly lacks the planned approach to infrastructure and urban development that China has witnessed over the past 20 years, but just because its growth has been a little slower, and perhaps more haphazard than that of China, the opportunities should not be underestimated.
There are a number of elements that are contributing to a very bright future for India. Dinesh Khanna, Regional Head of Transaction Banking, South Asia, Standard Chartered Bank summarises some of the factors that are continuing to fuel growth in the country,
“India has very favourable demographics.Over the next two decades, India will see a working population of close to 220 million, with the relative advantage of English language skills, education, links to Europe and North America, free trade agreements with Asia and a head start in R&D and software development, assisted by supportive legislation.In addition, we see that Indian growth is run on the twin engines of consumption and investment,which provides balance.This resulted in India demonstrating significant resilience to the crisis.”
Government initiatives are also helping to add momentum to economic growth. Exchange controls that had restricted the flow of capital have been relaxed in order that India can become a more significant global player, and encourage greater investment in infrastructure. Licensing has now been abolished in all but the most sensitive industry segments, making it easier to do business. Consequently, India has a strengthening private sector, which is encouraging increased productivity and professionalism through greater competition. Crucially, Indian conglomerates such as Tata Group are taking a lead role, in addition to foreign multinationals. Tata Group has a strong reputation for ethical business and corporate responsibility to employees and communities, which will be an increasingly important factor for companies working in India, in order to raise standards for people across diverse income levels, discourage the sweatshop culture that will hinder growth, and therefore create a larger and more affluent consumer base.