The Hindu : Business : `India is a rich country in waiting'

Online edition of India's National Newspaper
Friday, Feb 11, 2005

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`India is a rich country in waiting'

By Our Special Correspondent

CHENNAI, FEB. 10. The Lead Economist, World Bank, Lant Pritchett, today described India as a rich country in waiting, whose economy had been moving in the right direction right from the 1990s.

Addressing a national symposium on `growth and competitiveness in a global environment' held by the Loyola Economics Association for Development here, he said.

India's performance in the 1960s was average and in 1970s it was under performing but in the 1990s, it started growing faster.

Though China with 7 per cent growth rate had outperformed India with 4.4 per cent, only 10 per cent of the countries in the world grew faster than the latter, he pointed out. The Indian economy, which had been growing faster but from a low base, should be seen against the backdrop of deceleration observed in some hitherto fast growing countries such as Korea. However, it might take 61 years for India to reach the "current growth level of the United States", he felt.

Many countries had seen spurts of rapid growth, then they suddenly took a nosedive and suffered macro-economic imbalance caused by public sector borrowing and debt crisis, he said citing Brazil as a classic example. According to him, the Brazilian miracle of the 1970s had since completely evaporated. In this context, he stressed that India should steer clear of a stall and pitfalls along the path of progress, as growth was not a process that could be taken for granted.

In his view, India should not think itself as a poor country striving to be modestly less poor. He cited democracy, political continuity, elite education, open ideology, large population, integrated market, adequate but not abundant resources and English as one of many languages, as factors contributing to India's strength, which had the potential for super fast growth.

But it should acquire adequate fiscal space to meet its infrastructure needs, Dr. Pritchett said.

Another grey area was that the country's growth was concentrated in a few cities, mainly in the South and West while entire States such as Bihar and many rural areas were far behind, he said, adding that educational inequalities posed a major risk for growth.

India should choose a path of steady progress, as the ride would be bumpy if it went faster, he cautioned.

Rev. B. Jayaraj, Rector, Loyola College, Rev. A. Albert Muthumalai, Principal, and B. Bhagwan Das, symposium director, highlighted the theme of the meet.

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