With the Indian economy growing at a pace of around 9% per annum with a booming IT sector, a hotspot for International business outsourcing can we expect India to emulate the success of the Asian tigers. Despite of the rapid growth rate that is unfortunately much lower than that of the emerging Asian countries like China, the growth spots are concentrated in a few service specific sectors like IT and IT-enabled services with potentials in other sectors largely remaining unexplored. The Indian Nobel laureate, Prof Amartya Sen has described the Indian economic and social scenario as moving in the direction that is half-Californian and half sub-Saharan. While popular media hype in India is concentrated on the success of the Indian IT giants, the nouveau riche riding on the waves of overvalued equity prices, the poor performance in the manufacturing sector, low growth in the agriculture sector and the condition of large number of Indians steeped in poverty is often underplayed.

Globalization has brought into the fore a new India where the rich and the successful live in an oasis of galore while the deprived and the impoverished masses dwell in abject poverty. Success of Asian tigers like China has largely been a diversified exercise with all around economic reforms in the primary, secondary and the tertiary sectors. Agricultural productivity, infrastructural development, subsidies to small and medium scale industries and encouragement of foreign direct investment in the large-scale industries along with labour reforms have transformed China from a low growth agricultural nation to a nation on high growth trajectory.

For India to become the next Asian tiger, sector specific growth will not suffice. East Asia’s greater success in poverty alleviation, experts say, lies in greater openness and market orientation that led to labour-intensive pattern of industrial growth that led to rapid industrialization and poverty reduction. Most of these countries still work under strict authoritarian regimes that have stymied any efforts to destabilize industrialization. Unfortunately, for India, nationalization of industries had hardly worked in the past paving way for greater private participation in industries. However, infrastructural development like transport, electricity, roads and water supply is largely the responsibilities of the governments. Failure on the infrastructural front, largely a result of bureaucratic corruption and inefficiency along with vested political interest, has not allowed industrialization to reach its full potential. With the series of economic success hardly having any trickle-down effect on the masses India needs to tread a long path of development before it can attain oneness with the Asian tigers.

Source: BBC
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