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‘India
2020’: Moving towards a brighter path?
(Kannan R -
Research Associate,
ICFAI Business School,
Chennai)
Introduction
“Everyone should work hard to make
India a developed country in 2020”
-
Dr. A.P.J.
Abdhul Khalam, President of
India.
This statement has been
made by our beloved President and it has to be achieved only by the way of
dedication in each and every level. India, has been a powerful source among the world
community as per the recent trend, but getting recognition in all facets is not
easy. There are various challenges and opportunities prevailing in and
around to go forward and simultaneously the threat is also mounting. In what
category we differ from others and how to solve this issue and emerge as a
superior power in the forthcoming years has to be clearly analyzed.
India
and its position
There
are various sector in India that needed to be discussed where the strength,
weakness, opportunities and threats lies. In the present scenario, Indians
are stronger in the Software (Information Technology IT) field and
the country is famous for a slogan ‘Knowledge Pool’. Likewise India has
weakness
in many categories too and they are briefly discussed under with some
statistics:
India: An Internal View
Population & Pollution
The
total population is of over 1 billion which will increases to 1.46 billion
by 2035 to cross China .
The huge populations will result in higher unemployment and deterioration of
quality. Literacy, also a worsening factor in India is yet another factor to
be discussed. According to 1991 census, 64.8% of Population was illiterate
and male ratio holds 75.3 and female rate is of 53.7%.
The literacy level in Rajasthan is very poor and even that has been crossed by
Bihar in the recent trend. The
major downtrend of education is due to the employment of child labor which is
spread all over India and this should be totally eradicated by the way of
surveillance and a good educational system must be implemented properly by
the Government.
China
today is in the top of population table. But this position will
not be prolonged for ever. China has already taken an effective
step to prevent it and their motto is to improve the
infrastructure as well as the total systems to meet their demand
in the forthcoming years. India, is still not taking an
effective method to control the population will in turn be
reflected in a big way.
Pollution is one more threat to the
environment, for the countries prospects. This has been experienced more in
urban areas mainly in metropolitan cities like Mumbai, Chennai, Hyderabad,
Bangalore etc. The water pollution by the sewage seepage into the ground
water and improper maintenance will lead to various diseases which in turn
can affect the next generation. In most of the cities there is no proper sewage disposal. The Government
has to take effective steps to control population which, in turn, will
minimize the pollution.
Poverty
& Child labor
Poverty
questions the entire strengths of India’s political view and minimizes the
energetic way of approach. The shortfall of rains, enormous floods,
unexpected famine, drought, earthquake and the recent tsunami hit the
country in a negative way. The proactive approach through effective Research
and Analytical study helps us to determine the effects in advance and proper
allocation of funds is a prerequisite. In developed countries like US, Japan
precautionary methods are adopted to overcome this, but it has to be
improved a lot in our systems (India).
Increased
population is one of the major reasons for poverty and the
Government is unable to allocate the basic needs to the society.
India, has an estimated population of over 1 billion people with nearly 400
million people living below the poverty line and 90% of active
population is in informal economy
.
The children are forced to become a child labor due to their
poverty, differential caste system and untouchables are still
customary in some of the states in India. They are working in
match industry for daily wages, as servants, mechanics, stone
breakers, agricultural workers etc. The education should be
mandatory for under 14’s and to prevent child labor, existing
laws which favors the Anti Child Labor Act should be implemented
by the Government vigorously. There are many social welfare
organizations fighting against child labor, aiding them for a
better life.
Corruption
The
one disease which has slowly spreads its wings into the country is
corruption. “The corruption report released by BBC News 29th
August 2002, says that the least corruption nation starts from the countries
like Finland, Denmark, New Zealand, Iceland, where the Britain stands in the
10th place, while US in 16th, Germany 18th,
Japan 20th, Sri Lanka in 52nd, India stands along with
Russia in 71st place and Pakistan at 77th place
sharing with Zimbabwe. Bangladesh is at the bottom which is the most corrupt
country in the world”.
Communication
& Technical skills
India is a country with a huge
population. More population will result in cheap cost by virtue of the
demand supply concept. Most of the foreign countries try to utilize this
factor by outsourcing their business in India with a very low capital.
According to US, India is a “Knowledge pool” with cheap labor. The major
advantage is our Communication and Technical skill which is adaptable to any
environment. The cutting edge skill in IT of our professionals will help the
outsourcing companies to commensurate with the needs of the consumers in a
short span. The major competitors for India are from China and Philippines
and by the way of an effective communication and expert technical ability,
Indians are ahead the race.
Government
Support
The Central Government supports the
States by the way of increasing the business opportunity and decreasing the
unemployment by promoting the outsourcing, lending finances to the State
Government to fulfill the needs to overcome poverty, natural calamities and
for periodical assessments. By the rapid development in the BPO sector, the
Central Government took an adequate step to gather business in plenty of
ways by improving Infrastructure through necessary funds to the State
Government. The major Metropolitan states like Bangalore, Chennai,
Hyderabad, Mumbai, Pune etc are targeting vigorously in the outsourcing
field by giving various amenities to the outsourcing companies like Tax
concession, allotting of land etc., to start their businesses in its cities
without any hurdles. Thereby most of the MNCs preferred India as their
destinations and capitalize the resources to maximize their assets.
Foreign Exchange Reserves
During
2003-04 the foreign exchange reserves which includes gold, SDRs and the
reserve position in IMF accounted to $113.0 billion .
It rose to $130.02 billion
by the end of December showing a positive trend in the capital market. The
huge reserves by the way of foreign exchange will help to promote newer
business as well as to revitalize the sick industry in and around the
country. Because of the abundant reserves, the recent Tsunami devastation
was also handled without looking of funds from developed countries. If this
scenario in the foreign exchange reserves persists, India can also decrease
the debt burden in the World Bank to a minimal and utilize these funds for
the welfare of the country.
Research and Development
Our
neighboring country China’s expenditure in Research and development is $60
billion and standing in the 3rd position next to US and Japan
with US$282 billion and US$104 billion respectively (Source: Beijing based Economic
daily). About 40% of expenses are covered by the Government and 60% came
from domestic and foreign enterprises .
India’s input in R&D in outsourcing market in IT, Telecom and
Pharmaceuticals was $1.3 billion in 2003 and will grow to $8 billion in 2008.
A number of IT
Companies have started their businesses and have outsourced their R&D wing
to India. The best example is that of the General
Electric Company (GE) which has already set up an R&D facility in Bangalore to
design new products and samples to meet the future competition with a net
worth of 80 million and employing 1600 people. Car-maker Daimler Chrysler,
Hyundai and some Indian companies like Tata, Infosys and Wipro are also in
the list
of companies who investing heavily in R&D.
India's, current budget allocation for Research and Development is of 1000 crore in 2004-05 against 775 crore in 2003-04.
The R&D department not only generates revenue but also provides necessary
job opportunities to the country.
Infrastructure
Infrastructure is another key factor for
outsourcing company to start a business in the particular city. It includes
road, rail, ports, power and water. The increased input in infrastructure
in India is very limited where China’s
record is excellent. For the development of infrastructure,
China spent $260 billion or 20% of the GDP while India is of $31 billion or
6% of GDP (Source: Morgan Stanley’s Mumbai based Chief Economist Chetan
Ahya ).
An interesting comparison
on Railways between India and China presented by Raghu Dayal on December 17, 2004 in
Economic Times says that “Indian Railways laid 53,596 Km in 1950,
against Chinese railways 22,161 Km whereas by the year of 2003, Chinese
railway had laid 73,002 Km as against 63,122 Km in case of Indian railways”.
Even the passenger reports are also less when compared to China. The road
facility in India has to improve a lot by the way of constructing more
bridges and highways to meet the future demand.
Safeguard Measures
India in earlier days gave more
importance for the development of Industry and less importance to other
departments. But the scenario has quite changed now-a-days by allocating a
special budget of funds for the security. This is because of the frightening
increase in terrorism all around the world especially emerging after the 9/11
terror attack in US. In the last ten years, budget towards the development of military
forces is higher when compared to others. It shows that the threat from our
neighboring countries is escalating. India has to concentrate more on this
security factor to wipe out the problem in the way of cross-border
terrorism.
Conclusion
Making
India, a developed country in 2020 is not an easy task. India has to keep in
check the Population, corruption and pollution and and will have to
improve the infrastructure. It must also improve social structure and invest
more on security. To quote China as an example is that they demolished an
old building to construct a very big port to meet future demands, but India
is still waiting for things to happen. India in the recent past has
improved a lot in the foreign exchange reserves, outsourcing business and in
exports too. The profits gained are to be spent for the development of the
welfare of the country. Most of the foreign companies are ready to do
business in India because of the individual prowess of manpower which will
give fast, quality output in a short span. India’s vision for a brighter
path will come true not only by mere words or speech, but extra effort
needed at
all levels to overcome
the pitfalls. Practical session is a requisite rather than fruitless
theoretical dialogues.
Bibiliography :
Trade Union World, India’s
sad record on Child worker’s 28th October 2004.
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