Coimbatore: India is poised to become a prosperous nation because of the open economy that is backed by reforms that have reduced Government controls, author and columnist Gurucharan Das said here on Wednesday.

At the eighth annual convocation of the PSG Institute of Management (PSGIM), Mr. Das observed that key reforms had opened up the Indian economy to trade and investment, dismantled controls, lowered tariffs, dropped tax rates and broken public sector monopoly.

He said that the average, annual growth of India's gross domestic product (GDP) had increased from one per cent in 1900 - 1950, to 3.5 per cent in 1950 - 1980, and 6 per cent in 1980 - 2003. In the West, the Industrial Revolution had taken place at three per cent growth over 100 years. At six per cent growth, the per capita income of India was likely to match the per capita income of the United States by 2066.

Population growth in India was slowing and literacy rates were rising, making possible universal literacy by 2013. For many years, the middle class had been "deliberately suppressed because of a wrong model of development," but it was now burgeoning - from 65 million in 1980 to 220 million in 2000 and 368 million in 2010. Poverty had been declining from 46 per cent in 1980, to 26 per cent in 2000, and 16 per cent in 2010. One per cent of the people in the country had been crossing above the poverty line every year for the past 25 years.

Per capita income growth had been zero per cent in the colonial period (1901 to 1950), but had risen to 1.3 per cent in the post-Independence period (1951 - 1980), 3.5 per cent in 1981 - 1900 and 4.4 per cent in 1991 - 2000 (the last two in the reform period). Per capita income growth was likely to be 5.5 per cent in 2000 - 2010.

"Every Government has continued reforms and even slow reforms have added up. Reforms have reduced Government control and there is now a divorce of politics and the economy. The standard of living depends on productivity, which in turn depends on technology. Trade is the way to bring prosperity to the country. India will rise on the shoulders of globalisation," he said. Mr. Das observed that the growth rate in India was likely to be double the rate at which the West had transformed itself. India's per capita income (based on purchase power parity), which had been $ 2,100 in 2000, was likely to increase to $ 5,800 in 2020, $ 16,800 in 2040 and $ 37,000 in 2066. India also enjoyed a "demographic dividend" - owing to a larger percentage of young people in the population - compared to most other countries. Hence, the labour force would grow in the coming years. The gap between the rich and the poor would shrink, with more people becoming affluent.

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