India Scenarios

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<ul><li>1.WORLD SCENARIO SERIES COMMITTED TOIMPROVING THE STATE OF THE WORLD India and the World: Scenarios to 2025Executive Summary </li></ul><p>2. The views expressed in this publication do not necessarily reflect the views of the World Economic Forum or the Confederation of Indian Industry.Confederation of Indian Industry World Economic Forum 23, Institutional Area 91-93 route de la Capite Lodi Road CH-1223 Cologny/Geneva New Delhi 110 003 Switzerland Tel.: 0091-11-24629994-7 Tel.: +41 (0)22 869 1212 Fax: +41 (0)22 786 2744 E-mail: contact@weforum.org www.weforum.org 2005 World Economic Forum All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, including photocopying and recording, or by any information storage and retrieval system. 3. Executive Summary Bolly World iandeI alh Paat ar Bh a kt aAt 4. India and the World: Scenarios to 2025Executive Summary Executive SummaryFew countries can boast the immense diversity India and the world: How will Indiaof India: among its 1 billion people, there are 18take her place at the world tablemain languages, 844 dialects and six main and how will the worldreligions. Rich in the traditions and learning of accommodate the emergence ofmyriad ancient cultures, the sub-continent hasIndia as a global player? How willlong been a place of pilgrimage for travellers. the global environment change andSince Indias independence, ancient traditionshow might India respond?have increasingly converged with modern Geopolitical stability: Whatinfluences, and India has become progressivelydirection will the war on terrormore internationally integrated.take? What will be the nature ofSince the late 1940s the effects of Indias relationship with hergovernment controls led observers to coin the neighbouring countries? How willterm the Hindu rate of growth to describe the India ensure her energy security?countrys sluggish economic progress. However,Employment and demographics:the reforms of the mid 1980s and early 1990sHow can India take advantage ofsharpened the pace of change and, asher young and growing populationglobalization has advanced, prompted by rapid and transform it into atechnological developments, India has becomedemographic bonus? Will the risingmore significant in international markets. Nowaspirations of the young be met?many analysts are predicting Indias emergence as Education: How can India maintaina global player, set to follow the blazing economic and develop her educationalsuccess of another giant, China.excellence while making sure thatIt is not difficult to see the rationale behind increasing numbers of youngpeople across India are equippedsuch optimism. Key trends that could drive andwith employable skills?sustain these new dynamics include: Favourable demographics;Infrastructure: How will India A large pool of low cost, skilled develop adequate social andlabour; economic infrastructure that meet Entrepreneurial, indigenous the needs of both her people andcompanies;developing industry? Continuing economic reforms and Leadership: Can India develop theglobal integration; leadership necessary at all levels? A stable political regime and Will coalition politics continue todemocracy;constrain necessary reforms? Can A record of high, sustained growthnational interests and self-interestsrates.be aligned? Administrative and political reform:However, there are also major challenges that Can India strengthen her ability toIndia must address if it is to achieve andimplement and execute themaintain this kind of growth and development, necessary reforms and change? 2including:Will India break the back of deeply 5. India and the World: Scenarios to 2025Executive Summary entrenched corruption and India and the World: Scenarios to 2025 Figure 1 bureaucracy? Rural development: Is it possible for India to develop the rural sectorBolly WorldINTEGRATION WITH THE WORLD where the majority of her people reside? How will rural development ia nd contribute to the strength andeI al h robustness of Indias economy? CanPa India manage the disparity between urban-rural communities, and between states? EXCLUSIVE GROWTH AND DEVELOPMENTINCLUSIVE GROWTH AND DEVELOPMENTThe Key Questions for the Scenarios ISOLATION FROM THE WORLDFrom amidst the many challenges confronting ? India, the projects participants identified two core questions, the answers to which will shape theat ar Bh path of India in the next two decades:taak Can India engage the whole nation At in its quest for sustained security and prosperity? How will Indias relationship with the world impact the Indian Agenda? This building of a broad-based economy The projects participants used these questions provides sufficient internal strength to support to build three different possible futures for IndiaIndias ambitions to become a major world player. and the World over the next 20 years.However, a less benign future is also Different paths for India through to 2025 possible, especially if the international are represented in figure 1.environment proves less supportive of Indias Can India continue with business as usual aspirations. In Atakta Bharat (quot;India getting a path of rapid economic development that stuckquot;), the global economy slows, offering few benefits only a minority of the population? Bolly benefits to India, while within India there is little World is a story of how initial economic successand uneven development. becomes unsustainable, and domestic social andWithin the full document, available on our demographic pressures soon trigger an website (www.weforum.org), these basic storylines economic reversal.are further developed and supported by detailed But need this happen? Could India achieve modelling and additional analysis. Shock boxes sustainable economic and social success?on selected topics (analysing developments of Pahale India (quot;India Firstquot;) describes how aunknown probability which if they happen would widely shared vision for Indias future alignshave tremendous impact) have also been included national aspirations and creates common goals.within the scenarios, and presented in creative Everyone puts India first, determined that theformats for further illumination of the key 3 entire nation will benefit from Indias development.challenges. 6. Bolly World Bollywood is the name given to the highly successful Indianfilm industry, famous for its masala moviesmelodramaticextravaganzas with spectacular song and dance numbers. The India and the World: Scenarios to 2025title Bolly World reflects a future in which Indias leaders areso dazzled by the immediate gains to be made in internationalmarkets that they fail to implement much needed domesticreforms. The scenario is told as a conversation overheard on aplane flying from Delhi to Dubai in 2025. A charteredaccountant tells his travelling companion why he thinks Indiais no longer experiencing international success and is facingso many problems. As he puts it, the situation is just like Executive SummaryBollywood itselfonce you get behind all the glitter and therazzmatazz, you realizethe whole thing is just an illusion.Pahale IndiaPahale India means India First and this is reflected in thescenario in at least three ways: 1) people from across Indiaput the needs of their community and country first; 2) Indiaemerges as a global economic leader; and 3) Indias dynamicinternal developments make it a source of inspiration for therest of the world. This story is told by a successful Indian businesswoman atthe 40th India Economic Summit in 2025. Her keynote speechexplores the reasons for Indias remarkable success.Atakta Bharat Atakta Bharat describes an India getting stuck withoutdirection reflecting the lack of unified action and absence ofeffective leadership that, in this scenario, create a continuousand cumulative source of problems for India. The scenario is told as the transcript of a speech given atthe monthly forum of the Hyderabad GM Crop Collective. Thecollectivea collaboration between the Hyderabad Farmers,Seed Developers and Rural Workers Cooperativesis anexample of one of the more positive responses made by someIndians to the multitude of troubles facing India. The speech itself also draws attention to the importanceof self-organization and self-help. Entitled Indias last 20years: Why we must help ourselves, it explores how initialwell intentioned attempts at reform in India failedbecause ofcorruption, inadequate planning and insufficient political will. 4The speaker raises a number of what he calls if onlys todescribe how Indias future could have been very different. 7. 2005-2015: The lavish promises of international businessincome groups hamper equitable growth. In many poorer encourage the Indian government to make changes thatstates, unemployed and disaffected youth join extreme hasten immediate economic growth. Low operation costs religious groups, take to petty crime, or are drawn to quot;sons and cheap labour attract the investments of the international of soilquot; type movements. These tendencies preoccupy India and the World: Scenarios to 2025 communitybut these are concentrated in IT and upper- policy-makers and governments at all levels, making it end knowledge intensive sectors.difficult for them to focus on measures to promote Anxious to hold the attention of global business, the economic growth and equity. Indian government follows its lead as it makes its ownA global economic downturn induces OECD countries investments. Rural areas remain undeveloped and under-to focus on efficiency and competition in domestic funded and growing numbers of poor and unemployed are industries. This causes greater unemployment in these migrating into the cities, whose infrastructure cannoteconomies, prompting multinationals to withdraw and support them. Indias leaders discuss the problem of reduce international investment in India. Preoccupied with poverty but fail to make necessary reforms.behaving like a global power, India has neglected regional Executive Summary relationships and now cannot rely on them to bolster 20152025: Inadequate structural reforms mean much of economic performance. Economic growth is insufficient to the Indian economy faces constraints and the growth alleviate chronic poverty or raise living standards. India's momentum is unsustainable. Unreliable infrastructure, skill initial successes in the first years of the new century now shortages and growing disparities between regions and seem like a dream. 2005-2015: The many diverse individuals and groupsMeanwhile, it manages its ambitions to become a global fighting for Indias future align their energies and visionspower with sensitive handling of regional dynamics, carefully behind a single goal: putting India first. Crucially, thisfostering constructive relationships with individual countries. includes a new generation of leaders who push forward a series of legislative and administrative reforms. Six key areas 2015-2025: The international environment gradually grows needing urgent, large-scale investment are identified. They less benign and the global economy slows. However, become the cornerstone of a massive, countrywidebecause India has made adequate preparationsinternally campaign for change, known as PAHALE: the Six Pillars of in terms of reform and equitable distribution and externally in Indias Future:its international relationshipsit sustains a robust level of Poverty alleviation basic needs for all development. Agriculture and rural development Over the 20 years of the scenario, Indias leadership and Healthcaresociety build the capacity to implement reforms and sustain Access to education inclusive development across the country, taking advantage Leapfrogging infrastructure constraints of its growing population. By 2025, India has been lifted by Effective governancea virtuous cycle of higher, sustained economic growth, Burgeoning globalization provides a huge boost to the balanced development and global integration, and is Indian economythe government balances the desire for transformed into a significant, respected and responsible immediate profit with more long-term development goals. global power. 2005-2015: Despite endless committees and interminable2015-2025: In the face of these escalating problems, the conferences about Indias future, the Indian government fails Indian government still cannot achieve consensus. The only to take action to instigate reforms. Within India, this means area they can agree on is the importance of raising military a lack of infrastructureinadequate roads; limitedspending as turmoil in surrounding countries increases. The communications, healthcare and education systems; noIndian people stop looking to the government for solutions attention to water managementand growing disparities and concentrate on finding their own means of survival. between rich and poor. Rural areas remain undeveloped and Corruption increases, as do conflictsover resources, and the numbers of poor and unemployed increase.religious and ethnic differences. The international environment is becoming increasinglyBut some, like the Hyderabad GM Crop Collective, find difficult: economic demands and domestic pressures mean more peaceful and constructive ways to self-organize: that the US is withdrawing from international engagements.pooling knowledge and resources, reaching out to find And the rest of the world seems to be following its example,similar groups in other parts of the world. By 2025, it is adopting increasingly protectionist policies. Gradually the movements such as these that provide a glimmer of hope in global economy slows. In this context, India is not a what seems otherwise to be a bleak future for India. tempting prospect for foreign investors who begin to pull5 out, or choose other cheaper, less dangerous destinations. 8. Bolly World India and the World: Scenarios to 2025iand eI al hPa Executive SummaryatarBhtaakAtThe Three Scenarios This table provides a comparison of some of the most important aspects of the scenarios, withmore analysis presented in the Annex.Bolly World Pahale India Atakta Bharat Broad-based, high growth Low growth, with potentialEconomic performanceGrowth led by a few selectbenefits majority and sustains constrained by lacklustre globalsectors, competitive in globalinternal economiceconomy and domesticeconomy. Rural developmentdevelopment, while enhancing economic weakness.neglected.global economic integration. Balanced development. Access Rural development neglected.Social developmentUnbalanced developmentto opportunities for all,People and communities mustdriven by a fewbenefiting majority, including help themselves. In best casesinternationalized sectors andwomen and the poor.this leads to community self-states. High disparity across organization; in worst cases,states and regions. corruption and violence. Proactive economic diplomacy.Reactive foreign relations,External relationshipsAspirati...</p>