India's rapid growth since 1980 is transforming it into a modern economic power. Measured in nominal US dollars, India's economy has risen from a low rank of 50 in 1979 to 12th position in 2003. In income-to-purchasing power parity, India ranked fourth in the world in 2003, behind only the United States, China, and Japan. Although still classified as a low-income country in terms of per capita nominal US dollars because of its huge population, if present rates of growth continue, India should reach low middle income status by the end of this decade
Due to the closed nature of the Indian economy until the 1980s India continues to be a small player in the arena of international trade and investment flows, But with the recent opening up of the economy and rapid growth in the export of goods and services, India is definitely gaining strength. The tremendous surge in the export of services since 2001 is drawing international attention, inducing many IT-based global services to move to India. Also, private capital flows - including foreign direct investment - which were initially very limited, are now showing dynamism.
During the 1970s, the debate in India centered on how to improve upon the historical 3 percent annual growth rate of the economy. Few would have predicted that this "sleeping giant" would wake up to attain - and sustain - an average growth rate of about 6 percent per annum for over 25 years. In fact, with 7.9 percent growth during 2002-05, there is increasing optimism about the economy achieving further growth. This situation has fueled a very lively debate in India, primarily on two aspects. The first concerns the factors underlying India's long-term growth and the other relates to the sustainability of this growth.
Sadiq Ahmed reviews the debate in the context of India's long-term growth experience, opportunities, and challenges and examines the factors that helped to achieve rapid economic growth during the past 25 years. He draws on his findings to analyze the main constraints that are likely to affect the country's growth in the future and highlight the policies that are needed to ease them.
Dr. Sadiq Ahmed began his career as a Lecturer in Economics at the Dhaka University in 1974 and later worked at the Bangladesh Institute of Development Studies as a Research Fellow. Dr. Ahmed did his MSc from London School of Economics and PhD from Boston University. He joined the Young Professional program of the World Bank in 1981 and held several key positions: Country Economist, Egypt, the Middle East and North Africa Region; Principal Economist, Indonesia, PNG and Pacific Islands, East Asia and Pacific Region; Lead Economist, Pakistan, Sri Lanka and Afghanistan; Country Director, Pakistan and Afghanistan Program; Chief Economist, South Asia Region; Sector Director, Poverty Reduction and Economic Management, Finance and Private Sector, South Asia Region; and Senior Manager, Regional Programs, South Asia Region. He took early retirement from the World Bank in July 2009 to return back to Bangladesh to contribute to the development needs of the country.
Foreword India's Emerging Global Significance: Can Growth Accelerate Further? Evolution of India's Long-Term Growth Determinants of Growth: Growth Accounting Policy Framework for Supporting Growth Emerging Constraints to Sustained High Growth Summary and Conclusions References Index