ABSTRACT
This chapter focuses on India’s position in the world economy. In particular, it attempts to present a comparative overview of India’s development experience with those of other developing nations in sub-Saharan Africa, Latin America, and East and South Asia. In this context, the BRICS and SAARC are also included. Of late, the two giants of Asia, India and China, with their domestic markets providing vast scope for diversified industrialization and trade, are classified by international agencies as emerging markets with potential for rapid economic growth. Both economies possess the capacity to become the “power houses” of global economy. China has become the manufacturing hub for the world and achieved extraordinary export success, while India’s phenomenal growth is mainly due to its services sector revolution. China launched market-oriented reforms in 1979, but in the case of India it started in 1991. In post-reforms China the gap with India, in terms of GDP growth rates, widened even as it narrowed in terms of development outcomes. India’s failure to achieve a labour-intensive manufacturing sector that can generate quality employment has been linked to the “missing middle” or the absence of robust small and medium enterprises in its formal manufacturing hierarchy. India’s growth performance in recent years has been truly impressive. When compared with other BRICS nations, India’s growth is just behind that of China. The Asian model of export-led growth is largely attributable to strategic state intervention in favour of domestic industries which ensured, inter alia, availability of low-cost inputs (including labour), favourable exchange rate management policies and adequate infrastructure. India’s overall rank was 124 (among 189 countries in the world) in the composite Human Development Index (HDI) in 2018 (United Nations 2019). As per the UN Gender Development Index (GDI), India fares poorly as it is classified in the fifth group among five groups of countries, which comprise countries with the most unequal distribution of development outcomes between men and women. Sweeping changes introduced under the New Education Policy, 2020 and healthcare (Ayushman Bharat) policies may help India achieve greater success in future.
