The Hindu Business Line : ‘India, China to emerge economic leaders’

Chennai, Feb 19 India is amongst the fastest growing free-market economies and has been on a growth trajectory of over 8 per cent year-on-year for five years in a row. This impressive performance has attracted global investors, according to Ms S. Gayathri, Manager, Finance, Brakes India Ltd.

Delivering a lecture on India Vision 2050 under the aegis of the BL Club at DRBCCC Hindu College at Pattabiram near here, she said that by 2050, we would witness the re-emergence of China and India as economic leaders, together contributing more than 35 per cent of the world’s GDP.

Reform growth

The nineties witnessed a series of economic reforms across several developing countries with the result that international trade grew by leaps and bounds and the Asian countries began accumulating huge foreign exchange reserves.

China overtook Japan in its foreign exchange reserve holdings and currently holds more than $1,500 billion in trade. The Indian economy has also seen a steep increase in GDP growth and a surge in exports. Despite a huge oil import bill, India’s foreign exchange reserves have swelled to $290 billion from around $50 billion in 2000.

Fund inflows

According to her, India has seen unprecedented capital inflows in the form of FDI and FII funds, presenting a challenge to the central bank and other policymakers. The inflow of foreign funds has seen the rupee appreciating by 10 per cent during the current year, denting export margins. This has triggered measures from the RBI and the Government to minimise the speed of rupee appreciation.

The Indian economy has transformed driven by a favourable investment climate and positive demographic factors. By 2010, while western countries would be faced with a manpower shortage, India would add the maximum number of people in the working age group and would hold centre stage in terms of manpower supply.

Business scope

India has opened up several opportunities for business. M&A activities, both by Indian companies abroad and by foreign companies into India, are expected to bring about better synergies as Indian companies mark their footprint across the world.

She also highlighted the challenges attendant to such a high growth rate and stressed the need for improving investments in the infrastructure and agriculture sectors. Special attention to social priorities such as education, healthcare and poverty alleviation were the need of the hour.

She impressed upon the students that while opportunities were aplenty given a growing economy, they should add value to themselves through education and proper grooming so as to be able to reap the benefits of growth.

Also present on the occasion was Prof N. Rajendra Naidu, Principal of the College.

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