INDIA’S JOURNEY TO DEVELOPMENT AND CHALLENGES
The economy of India is the tenthlargest in the world by nominal GDP and the third-largest by purchasing power parity (PPP).The country is one of the G-20 major economies, a member of BRICS and a developing economy that is among the top 20 global traders according to the WTO.
India was the 19th-largest merchandise and the 6th largest services exporter in the world in 2013. India’s economic growth slowed to 4.7% for the 2013-14 fiscal year, in contrast to higher economic growth rates in 2000s. However, India’s decisive election outcome has created the potential for further structural reform that could result in a near 7 per cent GDP growth rate over the coming decade, and bank capital injections could enable banks to facilitate funding for that growth.
This would have meaningful implications for India’s fixed income markets. It is believed that the next decade for India’s foreign exchange (FX) and fixed income markets will be marked by policy-driven reforms driving accelerated growth with increasing market liberalization. Recent figures already appear more encouraging than the dynamics that have been supporting stagflationary recession conditions: The country’s balance of payments has improved, spurred by FX depreciation and the Reserve Bank of India’s (RBI’s) non-conventional measures. The growth outlook has turned moderately positive, helped by a global recovery; and bad loan formation, even at state-owned banks, may now be moderating.
The narrative for Indian markets began to brighten even before the elections. Following the second stage of India’s economic liberalization and the foreign direct investment (FDI) reforms initiated in September 2012, foreign investment will likely be a major contributor to a jump in private investment. However, despite liberal FDI limits, it has remained moderate, constrained, in part, by administrative hurdles. As the obstacles are reduced, we expect FDI to lead an investment boom over the next decade, similar to China’s mid-1990s experience. We project FDI will rise to an average of 2.5 per cent of GDP (FY2014-24) from an average of 1.5 per cent of GDP (FY2008-14). We believe such foreign capital flow will lend significant support to India’s balance of payments trajectory.
Improving public health
Health care services in India have undergone a vast change over the past few decades and encompass the entire nation. The industry is expected to supersede China by 2030 in terms of population expansion. Hence, it becomes one of the essential duties of the state to raise the nutrition level, the standard of living of the people together with improving public health.
Health care Industry of India The rapidly increasing health care industry of India is one of country’s largest sectors, both in terms of revenue and employment. It has been estimated that the healthcare industry of India is will grow by & 40 billion. The continuous increase in the population of India is considered one of the principal reasons for the growth in the healthcare industry of India. The rise in the infectious as well as chronic degenerative diseases has contributed to the rise in the healthcare sector of India. Additionally, because of diseases like AIDS and several lifestyle diseases of India, the healthcare sector of India will have a constant growth.
In spite of the fact that the Indian healthcare industry is rapidly expanding, healthcare infrastructure in India is very poor. A noticeable percentage of India suffers from poor standard of healthcare services. Most of the healthcare facilities of India provided by the various healthcare services are limited and of low standard. In order to understand the current status of the healthcare services in India, it is important to know about the different healthcare services found in the country.
Public health services, essential public health services, preventive health services, mental healthcare services, home health services, magellen health service and school health services are some of the healthcare services found in India. Companies providing Health Insurance in India The various companies providing health insurance policies in India can also be put under the healthcare services of India. Some of the companies that provide health insurance coverage in India are Appollo DKV Insurance Company Ltd., Bajaj Alliance General Insurance Co. Ltd., Birla Sun Life Insurance, Aviva Life Insurance and the like.
Points to note
1).It has been found out that while the private health services have been rising for meet the needs of the rich citizens and foreigners, public health services in India are lagging behind and suffering in a major way.
2).It has also been found out that less than 1% of the GDP is spent on the public health care services in India.
3).Surveys made throughout India points out that 65% of the Indian population cannot access to modern medicines.
4).In addition, a number of drugs and even many diagnostic tests are still unavailable in the public health care sector of India.
5).Most of the hospitals, one of the prime healthcare services in India, are located in the urban areas, thereby making it almost impossible for the rural people to access.
Indian industry sees green shoots of manufacturing growth
A green shoots of revival have started to appear in the manufacturing sector, which is critical for job creation, with a majority of segments likely to post higher output, according to industry bodies. The survey conducted by CII-Ascon for the April-June quarter indicates positive growth in important sectors like consumer durables including the vehicle industry and white goods industry, which recorded a growth of 5- 10 per cent, leading to improvement in the overall industry growth.
The FICCI survey found that eleven out of fourteen sectors are likely to show improvement in production during the second quarter (Jul-Sept) of the current fiscal. Over 64 per cent respondents are not likely to hire additional workforce in the next three months, though this proportion is less than that of the previous quarter (75 per cent), indicating improvement in hiring outlook in coming months.
The survey gauges the expectations of manufacturers for Q2 for fourteen major sectors namely textiles, capital goods, metals, chemicals, cement, electronics, automotive, leather and footwear, machine tools, FMCG, tyre, textile machinery and more. Responses have been drawn from 392 manufacturing units from both large and small and medium (SME) segments with a combined annual turnover of over Rs 4 lakh crore.
An upturn in demand condition is also reflected in the improved order books of the manufacturers, said Ficci survey. While only 36 per cent respondents reported higher order books for the April-June quarter in the last survey, 43 per cent respondents reported higher order books for July-September quarter.
Soon after the 2014 Lok Sabha election results declared a thumping victory for the BJP-led NDA government, Prime Minister Narendra Modi invited the heads of all the SAARC countries including Pakistan, Bangladesh, Sri Lanka, Nepal, Maldives, Bhutan and Afghanistan, for his oath-taking ceremony, sending a major diplomatic signal to the global community.
Credited with being a focused administrator, Modi signalled that his decisive win would reshape India’s foreign relations and leverage the diaspora to increase investments, business opportunities and better relations. Modi went on to choose neighbouring country Bhutan over others for his first foreign visit.
“I will follow the (foreign) policies of the Vajpayee-led NDA government, and that also applies to the relationship with the United States. I don’t think a decision taken by any individual or one event should impact the overall policy,” Modi said in an interview. The winds of change were clearly being felt at home and abroad.
SAARC: A refocus on the neighbourhood
For the first time, leaders of all South Asian Association Regional Corporation (SAARC) countries were invited for the swearing-in ceremony of an Indian Prime Minister. The presence of all seven countries, Pakistan Prime Minister Nawaz Sharif, Afghanistan President Hamid Karzai, Sri Lanka President Mahinda Rajapaksa, Bhutan Prime Minister Tshering Tobgay, Maldives President Abdulla Yameen Abdul Gayoom, Nepal Prime Minister Sushil Koirala, Speaker of Jatiyo Sangshad in Bangladesh Shirin Sharmin Chaudhury, was a welcome step towards strengthening India’s relations with the SAARC countries. However, political parties in Tamil Nadu voiced their displeasure at Sri Lanka’s president Mahinda Rajapaksa attending the ceremony and held demonstrations against him.
Bhutan visit: Asserting influence in South Asia
PM Narendra Modi’s maiden foreign trip to Bhutan was intended to show that in the new scheme of things, the neighbourhood enjoys high priority. Inaugurating Bhutan’s Supreme Court building that was built with India’s assistance, Modi also laid the foundation stone of the 600MW Kholongchu Hydro-electric project, a joint venture between the two countries.
He also proposed to hold a joint sports festival between Bhutan and north-eastern states of India, doubling scholarships for Bhutanese students in India and establishing e-libraries in 20 districts in Bhutan Though his faux pas of referring to Bhutan as Nepal while addressing the Bhutan Parliament caused some embarrassment, Modi went ahead to say that “when Bhutan calculates its happiness quotient, having a friend in India is also a major factor.”
Meet with Pakistan Prime Minister Nawaz Sharif: Picking up the threads
Relations between India and Pakistan have always been tense, but differences between the two countries had escalated after the 26/11 Mumbai terror attack. Modi’s invitation to Pakistan’s Prime minister Nawaz Sharif for his oath ceremony was seen as an attempt at cooperation rather than confrontation, which was reciprocated by his Pakistani counterpart.
In their first meeting, Modi pressed for confidence-building measures, peace and security as well as enhancing bilateral trade, sending a positive message among the people of both the countries. Modi struck a pragmatic note with Sharif, underlining India’s concerns on terrorism and urging his Pakistani counterpart to crack down on militants and speed up trial of the 2008 Mumbai attack suspects.
Sharif also responded to the meeting positively, accepting the fact that the two countries must strive for better cooperation. In the interaction which was widely seen as an “icebreaker”, the leaders also decided that their foreign secretaries would be in touch and discuss a way forward on talks that had been suspended since January 2013.
BRICS Summit: New inroads
Pushing for better international governance, Narendra Modi said he favoured an open, rule-based, international trading regime which is critical for global economic growth. Modi’s first BRICS summit saw significant inroads towards the establishment of the New Development Bank and though the headquarters of the bank is slated to be in China, its first President will be from India.
Addressing the BRICS leaders, Modi also pressed for zero tolerance towards terrorism. He also met Chinese President Xi Jinping and both addressed the need for a solution to the boundary question. Further, Modi also favoured broadening the strategic partnership with Russia in nuclear, defence and energy sectors and invited President Vladimir Putin to visit the Kudankulam atomic power project during his trip in December.
India poised to make further progress on UN’s development goals
India has made progress on different indicators such as health and nutrition under the UN’s Millennium Development Goals and is expected to improve further upon them. “There has been progress in all the indicators and further progress is expected to be made in the remaining period up to 2015,” Planning Minister Rao Inderjit Singh had said recently.
As far as India is concerned, 8 MDGs with 12 targets are relevant which are sought to be achieved during the period 1990 to 2015, the minister said. MDGs are international development goals that UN member states and numerous international organizations, including India, have agreed to achieve by the year 2015.
These include eradicating extreme poverty and hunger; achieving universal primary education; promoting gender equality; reducing the child mortality rate and ensuring environmental sustainability. The minister’s said India had achieved the MDG target regarding poverty eradication. India had to halve the proportion of people whose income is less than one dollar a day between 1990 and 2015.
In 1990, India had 47.8 per cent such poor people and thus the proportion of this population is to be reduced to 23.9 per cent. However, India’s poverty ratio was 21.92 per cent for 2011-12. Similarly, India has to half the proportion of people who suffer from hunger by 2015 to 26 per cent. However, the latest figure for 2004-05 reveal that the percentage of such population was 40 per cent.
Education: Improving enrolment ratio
In the education sector, India has to improve the net enrolment ratio in primary schools to 100 per cent by 2015. The country achieved 99.89 per cent enrolment in primary education in 2011-12. The proportion of pupils starting grade 1 who reach grade 5 was 86.05 per cent in 2011- 12 against the target of 100 per cent. The literacy rate in India was 61 per cent in 1990. It went up to 86 per cent in 2017-08.
The ratio of girls to boys in primary education was 0.73 in 1990 which went up to 1.01 in 2011-12. Similarly the ratio of literate women to men (15-25 years) was 0.67 in 1990, which was 0.88 in 2007-08. MDGs target for both ratios is 1. The mortality ratio among children under the five-year age was 126 per 1,000 live births in 1990 which was brought down to 52 in 2012. The MDGs target is 42 for that.
Infant mortality ratio
The infant mortality ratio was 80 per 1,000 live births in 1990 which was brought down to 42 in 2012 against the MDGs target of 27. The proportion of one year old children immunized against measles was 42.2 per cent in 1990 which was improved to 74.1 per cent against targeted 100 per cent coverage.
Similarly, the maternal mortality ration per 1,00,000 live births was 437 in 1990 which was brought down to 178 by 2011-12 against targeted 109 by 2015.