Nowadays, India’s economy is known to be one of the top-largest economies in the world due to the major force of its youthful and skilled labour force. Despite ageing populations and improperly positioned skills, India’s young workforce has enabled it to capitalise on global events that present opportunities. India has gained manufacturing jobs in the last five years that were previously held by China.Therefore, India hopes to take over as the world’s class and gain the benefits of China’s slowing economic growth. However, India still has a long way to go. Currently, India generates one-sixth of China’s output per capita; its success over the last three decades has lifted millions out of poverty. This is something that India could do. Although India has a strong economy with significant potential, it may not follow China’s exact path. But it can still achieve significant economic growth by addressing these challenges and focusing on its own strengths. The question is whether India has what it takes to challenge China and the United States as the next economic superpower.
Firstly, India’s economic growth in the early 1990s, combining Soviet-style central planning and free market systems, led to a significant international debt problem. Therefore, the IMF revived India’s economy through the Washington Consensus. Therefore, India’s economic growth is largely due to its strong manufacturing sector and adaptability to global economic conditions. Protectist policies, such as trade restrictions, protect local industries, raise consumer prices, and maintain competitiveness. However, these policies can also increase costs for businesses. Governments can provide grants, tax breaks, or guaranteed purchases to protect local industries, generate jobs, and provide strategic benefits. India’s unique demographics and ability to outsource services make it a potential candidate for future growth. The service sector can create more value by charging premiums for products, leading to higher wages for manufacturing workers. Despite challenges like over-regulation and under-regulation, India’s service sector could potentially become a global economic superpower.
In conclusion,India has the potential to leverage its advantages and achieve this level of economic growth, but there are obstacles in its way. India’s youthful and skilled workforce has enabled it to capitalise on global events and gain manufacturing jobs. India has the potential to challenge China and the United States as the next economic superpower. However, India faces challenges such as dealing with debt, adapting to global economic conditions, and leveraging its unique demographics and service sector for future growth.
This article is a part of the class “751309 Macro Economic 2”supervised by Asst. Prof. Napon Hongsakulvasu Faculty of Economics, Chiang Mai University
This article was written by Apichaya Poolpoka 651615063
Reference:
Explained, E. (2022, October 1). India will not be the next China. YouTube. https://www.youtube.com/watch?v=mtvmqI0PV2M
India’s strong economy continues to lead global growth. IMF NEWS. (2018, August 8). https://www.imf.org/en/News/Articles/2018/08/07/NA080818-India-Strong-Economy-Continues-to-Lead-Global-Growth#:~:text=As%20one%20of%20the%20world’s,lift%20millions%20out%20of%20poverty.