New Delhi: India is well-positioned to continue its economic expansion and move towards upper-middle-income status, supported by poverty reduction, infrastructure development and growth on multiple fronts including manufacturing, finance and IT, American economist Noah Smith said in a new blog post.
Smith noted that India has made significant progress in reducing extreme poverty over the past two decades, while also lowering inequality. Citing the World Bank, Smith attributed the improvement to strong consumption growth, rising employment, especially among women, and expanded social transfers, including food subsidies.
India reached a stage of economic development comparable to where China stood in the late 2000s, both in terms of gross domestic product and the Human Development Index.
The blogpost noted that India’s development challenge is less demanding than China’s, as it had to escape poverty and improve living standards rather than establish global dominance in artificial intelligence or surpass the combined economies of the US and its allies.
Highway spending has increased fivefold over the past decade, while central government railway spending has risen eightfold.
Global analysts think of China’s future success as surpassing the combined economies of the US and its allies or reaching Taiwan or Korea’s level of income, or dominate Asia, he said, expressing his increasing skepticism about its ability to do all of those things.
“But India’s job right now is a lot simpler — it just has to escape poverty and become an upper middle-income country. And this I think it can do,” Smith said.
“The challenge now for India is to make the leap that China made in the 2010s — to build abundant high-quality roads, trains, housing, and energy, provide decent jobs and livelihoods to the majority of its people, and catch up to the frontier of technology,” he added.
The piece noted that India’s current growth is very broad-based — manufacturing is growing in tandem with services and the country is “making and exporting a bunch of different high-tech products despite China’s attempts to throttle Indian industrialisation by denying them key technological exports and factory expertise.”
(IANS)
