Indian Economy: Yesterday, Today and Tomorrow

Abstract

This article offers an analytic overview of India’s achievements to date, what its future prospects are, what its rise means to the global economy in the next fifteen years and what challenges India faces in terms of future reforms. The article begins by presenting a summary of the country’s growth experience during the last sixty years and relating it to the policies and political economy factors behind the adoption of those policies. It then discusses medium-term prospects of the country. Based on a set of key factors relevant to growth, it argues that India is likely to become the third largest economy in the world and an even bigger contributor to the global workforce than it is today. The article then turns to the study of the impact the growth has had on poverty alleviation during India’s sixty-year history. The remainder of the article outlines the key challenge India faces today and the reforms it needs to undertake to sustain and accelerate both growth and poverty alleviation. The article argues that India needs to walk on two legs – manufacturing and services – and requires reforms that would help strengthen both.