Vijay Anand | The Startup Guy.

About India: The Red Pill

Posted on: April 25, 2007

India is a fast growing super economy and all that. Yah Sure. But there is a bit of horror attached to that reality.

A recent report that was published makes some pretty scary predictions about India in 2020.

“India is going to create 120 million new jobs in the organized sector in the next fifteen years”. Most of it will be coming from the rural masses. Atleast that’s what is said.

Manish Sabharwal makes a mention in Knowledge@wharton that “In Five Years, 25% of the world’s workers will be indian”

All that is being painted rosy so far. Then it begins:

Ajit Balakrishnan, the founder and CEO of of Rediff.com, in a convocation speech made the statement, closely-following reports coming from various sources that:

“….and this part is often overlooked, is that in 2040, India’s per capita GDP will be just 15% of that of the United States and a third of that of even Russia.

Another way of putting it is that even thirty five years from now, the average Indian will earn just Rs 5,000 a month. On this income he will have to feed and educate his children, look after their healthcare needs, afford entertainment and life insurance.

This means he must have a place to stay with clean water supply at, say, Rs 200 per month, uninterrupted electric power, perhaps at 50 paise per unit at the consumer level, medical insurance at, say, Rs 10 per person per month and life insurance perhaps at Rs 5 per person per month. ”

I am not sure what you feel, but that is pretty scary numbers there. The economics, when broken down do stare blankly at you and begging, actually threatening you for an answer.

We are really going to have to re-look at the very core of how we do things – right from building businesses that are not focused on the dollar signs, but inclusive and can in return capitalize more on the returns and involve more human resources and such – but such initiatives require a much united front and someone to lead them – which will be the government’s role, but sadly that is a role that the government has failed to play time and time again in the past.

Coming back to the report on India 2020, and if we were to let out a sigh of relief that the prophecy of doom shall withhold till 2040, it is not so. We will be seeing signs of our economy fluctuating and struggling to adapt very soon. In 2020, it is said that – as per projections – the indian ruppee will strenghten and will equate to a dollar in 14 ruppees. The complications of that will be all over the place – from changing valuations, right to the price of commodity goods and edibles in the market, to the instability of the currency – which is predicted to drive 50% of this country below the poverty line. This is probably one of the most rapid growing economies that the world has seen and this is a challenge that China and India both will face, in this rapid global economy – simply to adapt, and do it fast – lest we should fall and find no more a time to stand up to the world.

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1 Response to "About India: The Red Pill"

Golly. You’ve gone and hit the nail on the head.

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