India:

Political Economic and

Social Challenges
By
Susmita Gongulee Thomas
May 25, 2006

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 Challenges- Internal, Regional &
Global
Social:
• Burgeoning population: 1.08 billion, related
problems: environment, poverty, health,
education, housing water, food and jobs
Economic:
• Jobs, growth and infrastructure, inflation due to
oil price rise, trade
Political:
• Terrorism, separatist movements, fractures due to
religious divergences despite traditional tolerance
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 India's opportunity and challenge

• 56 years we have achieved quantum jumps in many fields.

• Technology is the best example. IT, Atomic energy and Space
were indigenously developed and leapfrogged us into 21 st
century. Similar trends in the manufacturing sector
• Transition from a predominantly commodity-based agrarian
economy to a knowledge economy is already underway.
• Challenge before India is how to telescope social, economic
and developmental processes with technological growth
• How can we accelerate this, even as we protect the interests
and enhance the income of agriculturists?
• How do we move mind-sets from the 19th century to the 21 st?

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 Turning Challenges Into Achievements-
Demographic

• Burgeoning population: 1.08 billion

• Well-educated in English language, software
services/medical/technicians
• Second largest skilled technical manpower in the
world
• 24 years Median age: 700 million people of 1.1
billion are young. Young population will continue
till 2050
290,000 engineers graduate annually 300,000
technically trained graduates every year
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Progress of Social Indicators
Poverty (incidence)
1980s 1990s 2000
44% 36% 26%

Education (literacy rate)

1980s 1990s 2000
44% 52% 65%

Health (life expectancy)

1980s 1990s 2000
56 60 69(men)
33.3 58.1(women)
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 Turning Challenges Into Achievements
Developmental

• Population growth rate fell from an

average annual rate of 3.1% in 1947
to around 1.38% in 2006.

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 India: Utilising people to advantage
 Business Week of 8th December 2003:
"Quietly but with breathtaking speed, India
and its millions of world-class engineering,
business and medical graduates are
becoming enmeshed in America's New
Economy in ways most of us barely imagine".

 It is estimated that there are 120,000 IT

professionals in Silicon Valley.

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 Turning Challenges Into Achievements-
Economic
• Green revolution: 1967 to 1978. a record grain output of 131 million tons in
1978-79. world's biggest agricultural producers. And exporter of food grains
today 212.0 million tonnes
• Economic: greater need for water, fertilizer, pesticides, fungicides etc. spurred
growth of manufacturing sector, created new jobs, increased country's GDP.
• Increased irrigation created need for new dams, used to create hydro-electric
power. boosted industrial growth, created jobs and improved quality of life of
rural people.
• India paid back all World Bank loans for Green Revolution. improved India's
creditworthiness.
• India supplied Canada with farmers experienced in Green Revolution. Their
remittances added to our foreign exchange earnings.
• Sociological: created jobs for agricultural and industrial workers thru creation
of factories and hydro-electric power stations
• Political: India transformed itself from a starving nation to an exporter of
food. This earned admiration for  India in the comity of nations, especially in
the Third World.

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 India: Pharmaceuticals
 Indian pharmaceutical industry $6.5 billion, growing at 8-
10% annually, 4th largest pharmaceutical industry in the
world by volume, it is expected to be US$12 billion by
2008, with exports over $2 billion.
 India is among the top five bulk drug makers.
 There are 170 biotechnology companies in India, involved
in the development and manufacture of genomic drugs,
whose business is growing exponentially.

 Sequencing genes and delivering genomic information for

big pharmaceutical companies is the next boom industry in
India.

 New emerging industries areas include, Bio-Informatics,

Bio-Technology, Genomics, Clinical Research and Trials.
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 Reviving Secular Tolerance
"In India today,
we have a lady born a Catholic (Sonia Gandhi)
stepping aside so a Sikh (Manmohan Singh)
could be sworn in by a Muslim president (Abdul
Kalam)
to lead a nation that's 82% Hindu.

I defy anyone to cite another country with such

diversity and tolerance to its political leadership."

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 Turning Challenges Into Achievements-
Technology

• Indigenous Space technology used to take education and

development to remote rural areas, via television. The
Satellite Instructional TV Experiment (SITE) 1975-76,
used a state-of-the -art US satellite to broadcast TV
programmes directly to community sets in villages
• This became today’s DTH, or direct-to-home broadcasting.
• India-developed “direct reception system” a cutting-edge
technology enabling remote villages, without electricity, to
view TV programmes
• a great stride forward in using satellite TV t reach rural
children with high-quality education,
• Reached adults with vital inputs for agriculture, health
and empowerment.
• Challenge of reach overcome using technology and with 11
socio-economic benefits.
 Self Reliance in Technology
 India is one of six countries that
launch satellites, for Germany,
Belgium, South Korea,
Singapore and EU countries.
 India's INSAT is among the
world's largest domestic satellite
communication systems.
 India’s Geosynchronous Satellite
Launch Vehicle (GSLV) was
indigenously manufactured, most
components manufactured by
Indian industry.
 India provides aid to 11
countries, and writing off their
debts.
 India has loaned IMF US$ 300
Million.
 It has also prepaid $3Billion to
World Bank and ADB
 In 1968, India imported 9M
tonnes of food-grains. Today, it
has a food grain surplus stock
of 60 Million tonnes.
 India built its own
Supercomputer after US denial
of a Cray computer sale in
1987.
 India is one of 3 countries that
have built Supercomputers on
their own. (USA and Japan)
India’s new ‘PARAM Padma’
Terascale Supercomputer (1
Trillion processes per sec.) Only
4 nations in the world have this
capability.
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The Challenges Ahead

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 Challenges Lie Ahead
Several formidable challenges remain
• Exploding population 1.08bn to 1.63bn people, overtaking
China, (forecast 1.44bn from 1.3bn ),
• Resulting environmental degradation
• Poverty,
• Illiteracy,
• Ruptures and cleavages based on region, religion, language
and gender-threatening the social fabric,
• Urban congestion,
• Wounded eco-systems
• Critical power and energy situation.
• Water & food shortage

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 Recognizing Challenges
India recognizes reform can not be focused only on
economic challenges
• Need to integrate social and environmental
dimensions
• Encourage widespread participation of civil
society, businesses, local governments and non
governmental organizations in reform efforts.
• Increasing democratic participation, better
positions it to confront growing social and
environmental challenges, such as rural distress,
resource misuse, and the HIV/AIDS epidemic.

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 Strategy For Overcoming
Challenges
• Employment generation
• Sustaining high growth levels
• Encouraging R & D in high technology
• Increasing manufacturing base to add jobs
• Greater investment in infrastructure to bolster private
sector demand for labour
• Reducing poverty levels by boosting manufacturing
output, reducing workers in basic agriculture, & raising
agricultural incomes
• labor laws in line with global best practices
• Policies to control Environmental degradation

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 Challenges Ahead- Economic
• India self-sufficiency in food grain production, yields four-
fold. Food Corporation storages possess best-fed rodent
population in the world, with starvation deaths in far flung
areas. Provision of quality infrastructure is therefore vital
• Address issues of infrastructure bottlenecks, high cost of
power, high inland freight cost, high cost of credit
• Targets for development: An investment plan of US$38
billion in the expanded highways programme, US$13.4
billion in ports and US$ 8.9 billion in airports.
• Competitive edge lies in knowledge and technology, so
greater investment in R&D.
• Public Private Partnership to adopt policies to ensure long-
term technology security/superiority; Indian industry will
be able to compete with the best in the world. 17
 Regional Challenges
India committed to a South Asian Union as ultimate objective, with
mutual security cooperation, open borders and a single currency
India has the capacity and tradition to welcome its neighbours in
education, in health care, in tourism, in trade and investment

“….Friends, India is ready to do everything that is necessary, to walk as

many extra miles as may be required, to make this vision a reality.”

• Regionally, India recognizes it has a major role to play in fostering

south-to-south cooperation and strengthening regional economic ties

• Taken pragmatic steps to resolve the long-standing Indo-Pakistan

dispute, address current disputes over resources like water, help
return democracy to Nepal.

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 Challenges of globalization
• The rise of the developing world, particularly of China and
India, is reshaping the world economic and political order.

• Sir Martin Sorrell, Group Chief Executive, Wire & Plastic

Products (WPP) United Kingdom; 2006. “The dominance
of the US and the dominance of Europe – particularly
Western Europe – is eclipsed. What we’re witnessing is a
sharp shift in wealth in a relatively short period of time
from West to East.”

• Never before in the history of mankind did a country with

democratic dispensation have to feed so many poor, teach
so many illiterates and simultaneously compete with the
most advanced countries for a place under the sun.
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 Further Challenges of Globalization
• New dimension: globalization of both economy and
geopolitics.
• Rapidly growing uneven cross-border flows of goods,
services, people, money, technology, information, ideas,
culture, crime, and weapons
• Current globalization unique: revolution in information
technology, electronic mail, and instant availability of
information.
• Changing economic landscape, need for new jobs, for new
mindsets, and changing identities/struggles around the
globe, exacerbating imbalances in the global economy

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 India: Future Global Leader
India’s Future as an international leader
rests on
• Political will to achieve good
governance domestically
• Foster constructive partnerships
regionally and globally

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 GOI TARGETS
• Focus to eradicate poverty
• GDP growth rate of at least 6% per annum over the next
10 years
• Provision of basic minimum services: safe drinking water,
primary healthcare, primary education, public housing to
all shelter less, mid-day meal scheme to all primary
schools, road connectivity, streamlining public
distribution system
• Universal employment to guarantee 100 days of work
• Universal literacy.
• Agricultural growth thru improved productivity
• Efforts to promote rural farm and non-farm employment
• Improved access to credit and other resources.
• Maintain our competitive edge, thru R& D , knowledge 22
and technology growth
 India As Role Model
• The history of the 20th Century is behind us; its
consequences are with us. We have all come to live with the
reality of the new political, economic and social realities of
our globe.
• India’s transformation can serve as a blueprint for
sovereignty and democratic nationhood for other countries
in the developing world that are tackling the challenges of
development and leadership.
• Positioned as we are, geographically and economically,
India has a pivotal role in the region and in the world.
• India fully prepared to shoulder its responsibilities and
provide opportunities and extend cooperation to others.

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Innovative Cooperation with Chile
• TCS purchased Comicrom for US$ 23 million –
back office
• Indian pharmaceuticals reach US$22 million from
US$ 8 million approximately in one year
• i-Flex Solutions working with Banco de Chile US$
15 million, + Banco de Desarollo, Security Bank
and International Bank - banking software
• Trans-Santiago Consortium awarded to India’s
TATA Group -transportation
• Corpora Tresmontes placed an order for bio-
mass-fired boilers for US $ 400,000 fromThermax
India Ltd- using agrowaste 24
 CONCLUSION
• Confidence in India, in our democracy and in our economy,
has never been higher.
• We have been able to restore the pluralistic ethos that is the
essence of India.
• We have been able to reverse a dangerous trend of intolerance
that had begun to eat into the vitals of our nation and restore
pluralism, tolerance and compassion.
• We have been able to replace debates that sought to divide the
nation with debates that matter to everyday living of the
people, debates on issues of concern to the common man.
• There is active discussion in government, media and civil
society about options for growth, poverty reduction,
education, health, employment, basic facilities, infrastructure,
empowering people and helping marginalized and weaker
sections catch up. Such debates are the life-blood of our
democracy.
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 Our Focus For the Future
A.P J Kalam President of India

• A nation of a billion people rising to its potential is an

exciting feeling.
• As a nation we have collectively decided to sink the
differences of the past;
• we have restored to our polity a sense of healing;
• we have restored to our society a sense of inclusiveness;
• we have given our economy a sense of purpose.
• Our economy is on the move and our people are on the
march.
• We have recognized our challenges and we are working to
address them.
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