Where is India heading to?

India more than a country is a subcontinent full of history, mysticism and opportunities for locals and visitors. With a nominal GDP of $1,824 trillion dollars for 2012 is ranked as the 10th world's economy(1).

India has gone thru many challenges since its independence from Great Britain in 1947. With a relatively slow economic growth until 1991, the subcontinent has made its path to the contemporary world and paid its dues, some of them so high, to be recognized as a good player for the today's economy.

Despite India declares by constitution its secular alignment and guaranties the freedom of cult, which is backed up for the coexistence of a great number of the religions and minor tribal traditions. Religion plays an important role; not only in the daily living of the 93% of the population, who declare their association to a religion or cult in some manner, but in many aspects of the political and economic decision making at all levels of the government.

Four of the major world's religions have born in India (Hinduism, Buddhism, Jainism and Sikhism) and by 2001 Hinduism was the most popular one being practiced by 80.5% of the population; followed by Islam (13.4%), Christianity (2.3%), Sikhism (1.9%), Buddhism (0.8%) and Jainism (0.4%)(2).

The predominance of the Hinduism, Islam and Sikhism has created many frictions among their followers, deaths and wars. Undoubtedly, the events resulting from those frictions had an important impact in the development and growth of the country. To begin with, India was forced to divide in two countries after its independence from Great Britain, Pakistan for the Muslims and India for the other. Going further, the conflicts and frictions allowed two major wars between Pakistan and India; forcing the second, not only to increase its expenditures in defense but to associate with the Soviet Union for support before an US backed Pakistan, and to adopt many of the communism policies that will end up being unviable and unpractical for the right development and growth of a sane economy.

After "Perestroika", the naked truth about the Marxism-Leninism was revealed; autarkic behaviors proved to be unviable and unsustainable thru the time, protectionism showed to promote inefficiency, while created bureaucracy, corruption and a high dependency over a big spoiled state.

Many of the vices that slowed growth before 1991 are still present and refraining FDI for comfortably settling down to contribute with a higher growth, World Bank's Easy of Doing Business Rank positioned India at a lousy 132nd place in 2012(3), mainly because bureaucracy, corruption, power outages, inefficiency and social complacency.

Due to the collapse of the Soviet Union among other turmoil, India was in need for funds. IMF will help with some conditions. Including the implementation of the “Washington Consensus”. This package of reforms were implemented in several countries with good results, reducing the size of the state, removing barriers to the international trade, improving fiscal practices, setting a competitive exchange rate and allocating more resources for education and health. Deregulating the system will make the economy more competitive, create the right conditions for prosperity and improve globalization.

I am strongly convinced that the “Washington Consensus” was the core for spreading globalization to several nations of the world.

Indian parliament was informed by central statistics office(4) that the economy has slowed from 6.2% to around 5% for the fiscal period 2012 – 2013, the lowest since 2003, said minister of state for finance Namo Narain Meena to the Lok Sabha. Attributed to internal and global environment economic uncertainty and tight monetary policy to control inflation.

A plan is being made to boost the recuperation and consist of, “better access to finance for manufacturing, fast track of large investment projects in infrastructure, buffer stocks to moderate food inflation, strengthening of financial and banking sector and reducing volatility of exchange rate”(4).

On top of this, the Indian government announced “disinvestment in certain public sector undertakings, liberalization of FDI in multi-brand retail, aviation, broadcasting, reducing subsidies in diesel and fiscal consolidation”(4).

Today India have still a long way to go but if continue with privatization, fighting corruption and divorcing religious matters from the economical and political decisions a great future is about to come.

Cites.

1. International Monetary Fund
2. Census of India 2001
3. Easy of Doing Business Rank 2012, World Bank
4. http://profit.ndtv.com/topic/central-statistics-office