Mark Tully on the Indian economy
India and its economy have been back in the headlines today with the news that its industrial production increased in December 2011, suggesting that, along with China, it is riding out the recession hitting the West.
But Nobel laureate economist Joseph Stiglitz has urged caution as he believes that India doesn’t have a clear plan for economic development: “There is no clear roadmap for where India is going today. Fifty years from now, does it see itself much as it is today - a divided country, with the rich much richer, the poor perhaps a little better than they are today? Does it see itself evolving like the US, where even the middle class has not been sharing in the gains of growth?”
In his recent book, India: The Road Ahead, the economy is one of Sir Mark Tully’s main focuses. Speaking to Indian economists, based both in India and the West, he found there is reason for optimism for the country’s economic prospects. As a conversation with Ram Gopal Agarwala, who worked on econometric models of the British and Canadian economies before joining the World Bank, illustrated, IT is providing a huge spark in the Indian economy and building of the foundations of the removal of the license permit Raj. Ram’s optimism for the future also relied on the fact that he felt that India had a young labour force, which could be even further expanded if women came into it, and that education was constantly improving. He listed India’s high savings rate, its need for massive investment in housing and infrastructure, which could attract Asian investment, and the services it could now export because of the internet as huge positives.
However, is its potential being overstated? Most famously, in 2003, British economist Jim O’Neill of the investment bank Goldman Sachs, wrote his BRIC report which heralded that India’s economy would grow faster than that of any other major country between 2015 and 2050.
In the introduction to India: The Road Ahead Tully urges a more measured view. He quotes the work of William Nanda Bissell, a leading businessman and author of Making India Work, who warns against a ‘culture of short-sighted optimism both at home and abroad’. He went on ‘From glowing references in Tom Friedman’s bestseller The World is Flat to the new India to the gushing adulation heaped on its businesses by the Western media, India is constantly fed by an establishment drunk on visions of grandeur.’
So where does the truth lie? Will India continue to rely on the belief that the winds are so favourable it can simply sail ahead? Sir Mark argues for a middle road - he believes there is room for optimism and, like Ram Agarwala, India has a lot going for it. But to fulfil its potential to become an economic superpower, there are many steps ahead.
Sir Mark will be returning to the UK at the beginning of February and you can hear him discuss India’s future in two events:
Thursday 2nd February - 7.15pm - Wanstead Library - Tickets £5 available from the lirbary 020 8708 7400 or Newham Books 020 8552 9993
Wednesday 8th February - 6pm - Leicester Central Library
