Tuesday, January 19, 2010

What makes India such strong contender of being a superpower ?

Or Why is world going gaga over India's growth ?
Or Whats the cause of new found respect for India in world's eyes and our increased say in world forums?
Or Of all the countries opted for liberalism, why India (along with China) are the only ones showing such high growth ?
Or Why all foreign nations want to have a cordial relation with India ?
and most interesting of all ...... Remember 90s govt adds for family planning, where did they go ?

We all know reason of India's growth is liberalism. But many countries has opted for liberalism, why India alone (with China) showing such high growth.

India is among the most favorite destination for FDIs among all countries. Ya I know cheap labor but why do we have cheap labor ?

Answer to all these question (to surprise of many) is our huge population. Or economically putting it our vast human resources. This huge population not only serves as source of cheap labor (simple demand supply concept - huge supply of human capital brings down the price - the labor cost) but also as a huge huge market. Produce anything in India and its bound to sell in this huge market.

This huge market and cheap labor attracts FDI which in turn results high economic growth. Since we have not yet fully realized our human capital and our market are far from saturation, we are bound for growth for a long long time and eventually superpower.

This huge market is also reason for all countries favoring a cordial relation with India, after all they want Indian markets to be open for their companies.

And lastly till 90s we though our disabilities of poverty, unemployment etc are because of our huge population. Hence we got to see govt adds of family planning 'hum do humare do'.
After liberalization, picture changed and this huge population liability became an asset. Hence no more govt adds :)

Note - Additional factors such as well regulated market, huge resources, vibrant democracy etc have not been dealt here. Idea of this article is to bring out that unique feature of India with respect to other countries which makes it a contender of superpower. After all the word super power is relative !

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hmmm ! after reading the comments it seems people here are mixing two different question or are confused about the definition of superpower.

How do you define superpower ? Superpower as a notion deals with macro features of a nation as a whole - economic size , military power, political status in world etc.
In todays world China has emerged as a superpower but still is suffering from ills of poverty, poor-rich disparity etc. USA in contemporary time is still a superpower despite suffering from huge unemployment in its economy.

So point is India or for matter any country can be a superpower (macro concept) before attaining a developed nation status (micro concept) { c if you can grasp this idea ! }

Secondly ills of cheap labor (from individual perspective), low per capita income directs us towards a different question (though a related one) - Do we want such power or superpower status ?

And believe me this seemingly simple question will have a very complex solution ! As far as I can c, status of superpower and developed nation will prove complimentary to each other (barring some aspects)

For our big population, it seems population on one hand is driving us towards being a superpower, is also proving a hindrance for us to attaining the abilities of a developed nation or lets say cause for cheap labor or low per capita income. Eventually we will have to settle for a compromise !

5 comments:

  1. But doesn't it also mean a lower per capita given such a high base?

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  2. yeah thats true but I am here referring to our country as a nation , a single entity

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  3. Additional point: A well regulated market, so people are sure of where their money is going. Cheap R/D, and manufacturing.

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  4. One the contrary, i believe that population is probably the single biggest hindrance for us getting even close to be a superpower.

    Imagine 50 crores and not 110+ crores, we would still be cheap labour, as you highlighted.

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  5. agreed that having a huge population base is an asset and it is quite late that we have realized this. but on the question of being a superpower, there are various other issues which are more critical than having a population base. UK, Italy, Japan, Singapore are examples of how countries with small area and population have done wonders. what is actually more critical is what section of the population is economically productive (truly, human resource) We still have 5 people feeding on one man's income and hence unless more opportunities are created for the population to engage in productive economic activities, what seems an asset will remain a liability

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