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KK Birla May 09, 2007
First Published: 00:44 IST(9/5/2007) Last Updated: 03:48 IST(9/5/2007)
The Indian economy is on the path of rapid progress. In July 1991 the country’s economy was so shattered that India was on the brink of bankruptcy. The Congress won in the general elections of June 1991 and Narasimha Rao became Prime Minister. He took a wise step and made Manmohan Singh the Finance Minister who, in turn, opened up the economy to the private sector. The quantum of progress that India has made from 1991 to 2007 has not been achieved by any other country. It is a tribute to both the government and the business community. It will be an interesting study to present to my readers a picture of India as it may emerge by March 2020. An attempt has been made to assess the situation in a methodical manner, and not indulge in kite-flying and guess-work. But in order to study and ascertain what shape the economy will take by 2020, certain assumptions have had to be made. I have made two main assumptions. The first on labour laws. In India, labour laws were framed soon after Independence and became outdated a long time ago. India is perhaps the only country where so many restrictions exist on retrenchment of surplus labour force. It is sad that the government is not permitting the industry to reduce surplus labour. Labour laws have not been liberalised only for political considerations. My first assumption is that labour laws in India will be liberalised. I may mention that in China there are no such rigorous labour laws as prevalent in India. The second assumption I have made is that oil prices will float at around $ 70 per barrel. The way India has progressed post-liberalisation, the GDP growth should be around 8.5 per cent on the average. The growth in the industrial sector should be about 9.9 per cent, about 9.4 per cent in the services sector and 3.9 per cent in the agricultural sector. In the last four years,...