India Number One

So claims Swaminathan Aiyar in his column in the Times of India as he emphatically announces India’s professed transition from "a global supplier of software, generic drugs and auto components" to "a global managerial power, one that can take over multinationals across the world and improve their performance". He stakes his claim on the basis of India Inc.’s takeovers during the year 2006 – for example, Tata Tea acquired US energy drinks manufacturer Energy Brands for $677 m. Dr Reddy's Labs acquired Betapharm of Germany for $570 m. Suzlon acquired Eve Holdings of Belgium to become one of the world's top manufacturers of windmills, etc.

Well, hope is a good emotion to start the New Year with. So, for the first post of 2007, I’ll harmonize tunes with Aiyar and summarize all that seems well in India. Some of this touched my life and longing during my last month here in the country while much of these economic achievements fail to improve the lives of a majority of Indians. Yet, they should bring comfort and confidence as India moves forward into 2007.

1. As the country looks forward to the eleventh five year plan for 2007-2012, it considers real GDP growth rates of below 9% a failure. Contrast this with the sixth five year plan in 1980-85 where the country seemed content with an average real growth of 5.2 per cent.
2. There’s greater recognition than ever of India’s and Indians’ economic potential. There’s Aiyar’s list of takeovers by Indian firms. Then there’s Uncle Sam’s warmth wrapped in the Indo-US nuclear deal. A leadership role in global governance seemed imminent last year with Shashi Tharoor coming close to being UN Secretary General. Kiran Desai won a Booker. And, of course, all that talk about outsourcing, software exports, and becoming the third largest economy (after the United States and China) in the world by 2007 if one uses purchasing power parity. Ah, before I forget, only 14 IITans took a plane overseas this graduating year.
3. Manmohan Singh, in the cover story of “The Week”, writes that “India has become a net aid giver rather than an aid recipient”. This marks a broader shift away from the notion of a constrained economy, evident in the increase in savings rate (from around 23% in 1982 to around 30%) and investment rate (from around 25% in 1982 to around 30%), FDI and easy access to capital and equity markets.
4. There’s a discernible shift in consumption. Consumption at 64% of GDP is even higher than China’s (at 42% of GDP) and is reflected in greater choices and better quality of goods and services. This might be a good place to talk about rising inflation but I’ll stick to my promise for now. A marked change from the shortage economy of the eighties.
5. A heartening impact of civil society in the organs of the government finds place in the new India. My earlier post on outsourcing justice demonstrates that the influence of civil society on the judiciary was the star of 2006. This was reflected in broader cases of justice for the disempowered, public interest litigations, increased consumer awareness, and government support for woman empowerment.
6. Finally, something that was very visible to me as an outsider was the significant increase in the country’s confidence. Aggressive self-assertiveness is a far cry from the meek Indian of yore, and is to a large extent, a function of India being a young country, with a median age of 24 years.

There is some improvement in social indices such as woman empowerment infant mortality and literacy rates. But, I cannot cite them without talking about what’s obviously unchanged in the country. So, shall desist from that line of commentary.

And on that optimistic note, here's wishing all of BPO Journal’s readers a great year ahead!