With its ‘people wealth’, India ‘could be the most powerful economic entity’

India has the potential to be the most powerful driver of global economic growth in the remainder of the first half of this century, Jim O’Neill, Member of the House of Lords. The economist, who coined the acronym “BRIC”, at an event in Parliament this week pointed to the potential for a far higher growth rate given India’s favourable demographics.

India could “in principle for the remainder of the first half of this century…be the single most powerful marginal economic entity,” if a few things came down the road, he said at an event organised by the CII and the Indo-British All Party Parliamentary Group, on the contribution of Indian companies in Britain and the launch of the Manchester India Partnership.

“India could do so much better,” he said, arguing that given demographic trends India could be growing at 12.5 per cent.

“Between 2015 and 2035 just the increase in India’s working age population will be bigger than the combined working population of the four largest EU countries…if that translates into people actually having jobs and they boost productivity...in my judgment India could easily repeat in the next 20 years at least what China has done in the past thirty years and grow by double digits…they need to do more stuff in order to achieve this,” he said.

He added that this made it more essential for regions such as the North of England to focus on growing links with India which presented “as big if not bigger an opportunity than China,” given the demographic trend. “If we have this event in another 15 years time I’ll be saying ‘guess what? India creates another New Zealand every three months’…we are not at that stage but that’s coming down the road,” he added.

Baron O’Neill, former chairman of Goldman Sachs Asset Management, and former member of the British government, first coined the phrase “BRIC” in 2001, in a paper for the investment bank.

He grew up in the Greater Manchester area and remains a strong advocate of the Northern Powerhouse Partnership.

India’s success story

Earlier in the event India’s High Commissioner to the UK, YK Sinha, had criticised the British press for their focus on negative stories about India.

Pointing to the The Times , the Guardian and the Financial Times (the last of which he said had been very bullish on India until very recently), he said stories about India focussed on negative angles.

“Where is India’s success story? Why is everyone queuing up to assiduously woo India: there must be a reason? There is something right happening in India and I’m afraid that story is not being well publicised,” he said.

Despite India being set to grow 7.1 per cent this year and 7.8 per cent next year, India was still being criticised for not growing fast enough, said Sinha. “India is the story of today and it will be the story of tomorrow…Engaging India is extremely important.”

The High Commissioner said that while India and Britain’s long history could be seen as an advantage, it also could be a disadvantage. “People here feel they know India well but I’m afraid they don’t,” he said.

The High Commissioner also highlighted Prime Minister Narendra Modi’s forthcoming visit to Britain – which will combine the Commonwealth Heads of Government Meeting in London in April and a bilateral visit. The Commonwealth had until recently suffered from “benign neglect,” he said.

As Britain prepared to leave the EU it was time for the country and others to look towards the Commonwealth not just as “an old boy’s club to talk about shared legacies of the past…we have to be forward looking,” he said.

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