Sunday, March 30, 2014

The Prize - That is India!

The Prize

What is the future holding for the great nation of India? Why so much competition to win the heart and mind of India by various internal political dispensations and external nations? What prize India holds in near future?

Since independence India has been consistently the ~10th largest (nominal) economy in the world. The efficiency/inefficiency of various governments pushed this position up or down by one or two positions but India on the whole maintained the pace.

But the winds are changing now and  India is at the cusp of a whole new world where it is at qualitative advantage to propel into the distinguished group of world powers. Let’s see what they are.

Look at the information presented below graphics to get the details. Following are the key trends:

·         Economy
At market exchange rates, India will achieve a per-capita income of $5000 by 2020 (mid-level economy) and propel to an advanced economy by 2040. In 2050, an average Indian will have higher per-capita income than a EU citizen or Saudi Citizen.

Indian economy will be bigger than EU economy by 2030 and by 2050 it will be more than 5 times that of EU economy

Indian economy will be 5 times that of Saudi Arabia economy by 2020. An average Indian, with all its 1.4 billion population, will be richer than a Saudi Arabian citizen by 2040.

·         Human Development Index (HDI)
Between 1975 and 2003 India has moved from a HDI score of 0.4 to 0.6 with 1.0 being the highest possible Human Development Index. India achieved this great feat while keeping the average per-capita Biocapacity consumed constant. In comparison China moved from a HDI of 0.5 to 0.75 but at the cost of double the bio-capacity, that is consuming nearly double the natural resources to achieve same amount of HDI improvement.

Continuing at this pace India can achieve a HDI of 0.8+ by 2025, thus making the quality of life of Indians at par with today’s western societies. If India can achieve this while maintaining its Biocapacity score that means Indian HDI is not only world-class but also sustainable. On the other hand as other nations push to improve their HDI at the cost of biocapacity then the western societies will be pressurized to control their biocapacity usage which may result in reduced HDIs in those societies.

·         Demographics
For the first time since Independence India achieved a favorable dependency ratio, number of dependents per working person, around 2005. In comparison China achieved this favorable demographic as early as 1980s, which helped that nation to propel ahead. 

Interestingly China’s dependency ratio optimized around 2010 and is trending –ve to reach unfavorable ratios by 2040. On the other hand India will continue to improve this ratio well in to 2030s and continue this favorable conditions much beyond 2050.

On the other hand all most all western nations will have an unfavorable dependency ratio during the same period making them face higher social costs and unfavorable national power equations.

·         National Power
The traditional national power measure is a function of a nation’s population, economy (GDP), military budget and Technology. With improved HDI and economic indicators combined with demographic dividend India is poised to grow its national power significantly in the upcoming decades. Studies show that India will cross European Union by 2030s and USA by 2050.


This brings us back to our key question - Why so much competition to win the heart and mind of India by various internal political dispensations and external nations?

The bright future opportunities described above holds a very valuable prize for the leadership dispensation of this nation. Whoever oversees this great transformation of India will not only define India’s future for next century but also for the world. 

If this transformation is controlled & managed by Western handlers then we can be sure that the once great Hindu civilization, that withstood centuries of Abrahamic onslaught, will permanently lose its unique identity and will melt into Western Universalism. 

On the other hand if by fate Hindu civilization can own this transformation then it can instead bring back the glorious epoch of Bharat when India was 30% of world GDP and Jagat Guru (teacher of the world) and lead the humanity towards Vasudhaika Kutumbam!

How does this great prize holds for the next administration?

Depending on what political dispensation at the helm, during 2014 and 2019, India is expected to grow at a steady pace of 7-8%.

  • This translates into anywhere between $190B to $279B annual tax revenues to the next government at a very conservative 10% tax revenues as percentage of GDP.
  • Over next 5 years India will spend >$120B towards capital investments in Military.
  • India will have national savings in excess of $4T over next five years.
  • Based on how much of these savings are tapped for Industry and Infrastructure, India can add at least $1T to its capital markets doubling its size in just 5 years without taking market growth into consideration. In addition that India can self-finance its infrastructure vision of investing $1T in next five years.

All this means the next political dispensation can decide how $1T capital is spent every year from 2014-2019. This itself creates immense political, economic and social clout for this political dispensation within India.

That is the prize of 2014 elections!

1 comment:

  1. RamaY ji

    We have to try to get out of thinking about economy in GDP paradigm, US dollar based paradigm, global statistic based paradigm.

    The curious thing in the west is the Forbes rich list. It's the western process where they like their wealth to be stated, then printed and compared to others is a curious dick measuring contest. A woman entering this list is always mentioned with her husband but a man never finds a woman to be mentioned. As said its all dick measuring contest.

    Now if you really want to think about how rich can indians can be, think about how much gold Indian women hold. There is top your answer.