Once again, these are the topline notes to kick off a Pestle analysis of India--this is very basic stuff culled from Wikipedia, CIA World Factbook and Nationmaster. India is the largest democracy in the world, the second in population, with 1.16 billion people, and 12th in GDP, with $1.23 trillion. India is a country that benefits from having its GDP converted to purchasing power parity, and given the much lower cost of goods and services there its probably accurate to use this, whereas it's not much use for the countries we've looked at so far. At PPP, India's GDP is $3.39 trillion. A lot of that money gets spent on the military--India is 10th in the world with $32.7 billion in annual spend on defence, in no small part due to its nuclear weapons programme.
The first item that gives me pause when talking about India is its neighbors. India will struggle to maintain stable and peaceful borders with the likes of Bangladesh, Bhutan, China, Myanmar, Nepal and Pakistan. And a clear precondition for development is peace. India is not lucky in its choice of neighbors, and this is important. It has been in 5 wars since 1947. Another precondition is either called stability or internal coherence. Wikipedia says there may be as many as 1,652 dialects in India--they have two major families of languages, and 14 recognised major languages within India's borders. More than 13% of the population is Muslim. The caste system still divides India, despite laws designed to prevent it.
India is poor, unequal in income distribution, and growing. It did better with the Golden Decade than many of the other countries we are looking at, reducing poverty by 10%, but their public debt is sadly 78% of GDP. It will be higher soon.
On the other hand, it has a large and growing middle class, one of the best predictors of ongoing development. India is number 3 in the world for internet users, with 80 million. India is 10th in the world for patent applications, both for resident and non-resident filers. And it's a young country, with median age of 25. But, they don't have good drinking water through much of the country, and they have big, big problems with air and water pollution, deforestation, desertification and soil erosion.
India's lucky to have Manmohan Singh at the helm during this period. He understands macro-economics and how public policy can interact with economic forces for good or ill. There will be a lot of ill. India has just lowered its growth estimate from 7.1% to 6.5% for 2009, which really means they are still being overly optimistic. They will be lucky to end the year with any appreciable growth.
India's society is beset by tension, only part of it coming from unequal distribution of the growth of the past decade. Terrorism by and against Muslims, persecution of Christians, blatant corruption in regional government (that seeps into Parliament) all make India a fertile ground for unrest over the next five years.
If my horizon was 25 years, I would be writing poetically about India's future. But, as we're talking about 5 years, my prediction will be considerably less optimistic.
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Posted by: Sombbroreig | 12/15/2011 at 12:55 AM