ASIA: INDIAN TIGER CHANGES STRIPES TO CHASE THE DRAGON
· Chinese-style 10% growth target, says planning chief
· Prediction that hardware will outpace software
Randeep Ramesh
· Chinese-style 10% growth target, says planning chief
· Prediction that hardware will outpace software
Randeep Ramesh
The Guardian, August 22, 2008
The Indian economy will expand at 8% a year - shrugging off the credit crunch and high oil prices - as it is transformed into an industrial powerhouse to rival China, the government's top policy tsar said yesterday. He predicted that Chinese-style 10% annual growth was "achievable". Montek Singh Ahluwalia, deputy chief of India's planning commission, said the government would be "targeting 9% growth, getting up to 10%. It may look ambitious with the global economic slowdown. But in the medium term, it is achievable."
The Indian economy will expand at 8% a year - shrugging off the credit crunch and high oil prices - as it is transformed into an industrial powerhouse to rival China, the government's top policy tsar said yesterday. He predicted that Chinese-style 10% annual growth was "achievable". Montek Singh Ahluwalia, deputy chief of India's planning commission, said the government would be "targeting 9% growth, getting up to 10%. It may look ambitious with the global economic slowdown. But in the medium term, it is achievable."
India's central bank expects growth in the year ending 2009 to slow to 8% - down from 9.1% in the previous 12 months.
The commission has signalled a huge shift in the economy - forecasting that in the next five years 58m new jobs will be created but none of these would be in the vast, unproductive farm sector. In the past five years farming employment increased by 9 million while India's rice production remained less than half the world average of four tonnes a hectare.
Economists have long argued that for India to mimic China's "long boom", the country would have to see industry fuel growth. In China, this led to millions of people leaving the land to work in factories. But this process has not happened in India, where growth has been driven by capital-intensive sectors such as information technology. Although hugely successful, Indian software companies employ only 1.5 million people - a mere drop in the labour pool of 470 million.
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