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Certainly, in accordance with the democratic principles approved by the international community, India has become much more than a major regional power. It is obvious that its development interests and concerns the rest of the world.

However, many observers have been disappointed by the figures published in recent months on the Indian economy, especially a projected growth rate of less than 6%, which is not sufficient to provide skilled or at least stable jobs to the 150 million or so people expected to enter the labour market in the next fifteen years. The current difficulties of Indian industry can be illustrated by the figure for manufacturing production which has dropped by 3.2% in one year.

It is also interesting to recall another piece of news that surprised public opinion in many countries at the height of summer – the gigantic power outages that affected more than 600 million Indians, or more than half the population.

Now this was not a trivial matter but a serious incident that reveals one of the major weaknesses of today's India, namely the worrying lack of investment in the country's infrastructure. Undoubtedly, the Indian central government intends to substantially increase the share of nuclear power in the coming decades and in many states clean energy projects are being encouraged. However, the country still draws most of its electricity today from coal mining which, of course, also raises issues of environmental protection.

It is obvious that massive investments to improve road and rail networks will also be needed to support the economic development of the country. Unfortunately the last figures about the foreign investment in India are very poor.

The news coming directly from India seems bleak and is burdening the climate of a Europe in crisis or recession, with the exception of a few countries like Switzerland.

However, with autumn here, we have many reasons to remain very optimistic about the development of the Indian economy. We are thinking in particular about the quality of the elites.

Among its most fundamental assets, it should be noted that India has the youngest population in the world, and its youth are being increasingly better trained in universities and institutes of excellence that are already attracting students from around the world.

More generally, the explosion of the middle classes will help preserve dynamic domestic consumption. There are Indian industries that could first take advantage particularly by offering public services related to communication and health, and all kinds of goods in connection with the transportation and housing sectors. But there are also exporting companies in the European Union and Switzerland that could extend and consolidate their presence in this huge market that is always on the lookout for foreign investment.

Perhaps India cannot be spared by the global crisis, but the quality of its businesses and its engineers, as well as the significance of its domestic market, will undoubtedly permit it to significantly mitigate the effects.

 

Y.C.
For Indiary
September 2012

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