Bharat, India the world's largest economy by 2050: Martin Wolf

Sacrificer           Martin Wolf 
Sacrifice code       wfor0257
Sacrifice date       2004

Bharat, the world's largest economy by 2050: Martin Wolf
'India will be largest economy by 2050'

India would emerge as the world's largest economy by 2050, Associate
Editor of London-based leading daily Financial Times, Martin Wolf,
has predicted. This on the back of leading international investment
banker Goldman Sachs' BRIC (Brazil-Russia-India-China) report which
had projected India as a potential winner ahead of China augurs well
for the country.

Wolf said that India would overtake the US and China by 2025 in terms
of real GDP growth and would become the largest economy by 2050.

Wolf who is also a visiting fellow of Nuffield College (Oxford
University) and a special professor at the University of Nottingham
was in Mumbai last evening to deliver a talk organised by Bombay
Chamber of Commerce and Industry (BCC&I).

"India could achieve a sustained growth of 8 per cent a year or more
with a higher national savings rate, greater spending on
infrastructure with greater private participation, faster growth of
trade and higher levels of inward direct investment. And all this is
going to surely transform Indians with their country emerging as
world's largest economy by 2050," reminded Wolf.

"India has taken huge economic strides in the last decade, but has
failed to take full advantage of the opportunities afforded by the
globalising world economy. As a result, real incomes per head have
risen at just two-third of China's rate," he noted.

The economist stated, "The biggest priorities for the new government
are re-allocation of often wasteful public sector spending, a huge
cut in fiscal deficit, and faster integration into the world economy.
This would rapidly transform the prospects of the Indian people and
the place of India in the world."

India's growth has increased phenomenally since the early 1980s but
still left much to be desired. Interestingly, no other significant
group of countries are posing challenges to India except China. More
over, the Asian giants, particularly China and India are creating the
biggest convergence story since the industrial revolution.

Pointing out that stable political institutions and sophisticated
legal system were India's strength, Wolf reiterated that consistent
low national savings, relative failure in industrialisation and
misallocation of public spendings as well as poor infrastructure were
the main hiccups of the Indian system.

"To emerge as the largest economy India needs to have a very strong
industry and manufacturing base along with agriculture. While China
had 12.6 per cent and 11.9 per cent growth in industry and
manufacturing in 1990-2002, India only managed to log 6 per cent and
6.6 per cent growth," Wolf noted.

Wolf admitted that the information technology booms, which India was
currently witnessing, was not going to generate more employment
opportunities and suggested that more focus should be paid on the
manufacturing sector rather than concentrating on service or
agriculture sectors.

Asked about the protectionist principles followed by developed
countries, Wolf said that it was a serious problem and there was a
need to look into it seriously for better integration with world
economies.

UNI

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