Republic Day: Superpower in the making?A few months ago, two Citibank economists took out their long-distance glasses and decided to find d economies

Republic Day: Superpower in the making?

Abheek Barman, TNN | Jan 25, 2012, 05.12AM IST

Republic Day: Superpower in the making?

A few months ago, two Citibank economists took out their long-distance glasses and decided to find the economies that would grow the fastest till 2050. Willem Buiter and Ebrahim Rahbari came up with 11 names: unsurprisingly, India and China figured in the list. Surprisingly , Brazil and Russia didn't .

Despite the long faces in New Delhi and Mumbai in recent months, India's prospects in the longer term look rather bright. Think of this: India will add 10 million new workers to its population - equal to the entire population of Portugal - each year, till 2025. China won't , thanks to its draconian 30-year old one-child policy.

Younger workers entering the job market means a constant churn of new skills, ideas and energy. It also means large jumps in savings, which can then be ploughed back into investment. Today, Indians save more than a third of their income, making them among the highest savers in the world. A growing, productive workforce can only add to that number.

But just adding new hands to the workforce won't help. The government has to make sure that kids get a good education at schools and colleges. This will need money, but more importantly, some checks to make sure that schools actually get built and teachers do their job properly. By 2007-08 , more than 82% of the world's population was literate. In India, the number is 67%.

The overall number hides large disparities : 82% of Christians, equal to the global average, are literate; Muslims lag behind, with only 63% being literate. There are large variations along caste lines as well: only 59% of tribals are literate and at 60.5% scheduled castes also lag pan-India literacy numbers. Women, whatever their religion or caste, fare worse than men.

So, just pumping in money and sarkari schemes after education won't suffice. Governments and progressive politicians will have to chip away at deep-seated social and religious prejudices.

A healthy workforce is a productive workforce. India's state-led healthcare system is tottering. Data like the number of new hospital beds added in every state hide the reality of large-scale graft, nonexistent infrastructure, spurious drugs and abysmal healthcare management.

To find out which states have the worst public healthcare systems, you just haveto see the list of states where over 80% of the spending on healthcare goes to private hospitals , clinics and doctors. The list includes Andhra Pradesh, Bengal, Bihar, Madhya Pradesh, Maharashtra and India's largest state, Uttar Pradesh.

Only 11% of India's population has any kind of insurance, so it's easy to understand why for a poor family, a debilitating disease affecting an earning member can be a financial disaster. Just like we saw with education, across nearly all health parameters , Muslims, backward classes and women fare worse than other Indians.

Things are slowly looking up: a scheme launched by UPA-1 in 2005 to beef up rural health services has led to more than 100,000 new healthcare workers entering the system after 15 years of stagnation. States like Assam have come up with innovative ideas to train paramedics and give them incentives to work in villages, rather than open clinics in towns.

A scheme to give cash to village women who deliver babies in hospitals, rather than at home has mixed results: hospital births have gone up, as have allegations of largescale skimming from the funds.

World Bank economist Ejaz Ghani has pointed to several factors, including the size of India's middle class, the improving quality of local government and regional stability that could boost incomes till 2025. By that year, he reckons that the size of India's middle class, now around 60 million, would grow to a billion people. Consumption will grow, poverty will drop sharply.

For the first time all the countries around India apart from China, have elected governments. This is a huge positive for a neighbourhood that even now, is the least interconnected region of the world.

The eight northeastern states of India are not only landlocked, but locked away from mainstream public imagination. That's a pity, because northeasterners are among India's best-educated and healthy people. We need more roads, airports and rail routes to connect the region to mainland investors, markets and opportunities.

During WW II, American General Joe 'Vinegar' Stilwell constructed a road connecting Assam, Burma and China's Yunnan province. With a reformist government in Burma now, India should open up overland routes from Nagaland and Manipur as important trade and tourism highways. With railways running alongside, the northeast can become India's trading hub with China and all of east Asia.

We crib about the shortage of electricity in India, but forget that many projects which started a few years ago, will come on stream soon. By the end of this year, more than 16,000 megawatts of new electricity capacity will come on line. More will come on stream through the next few years.

This will change many things. Today, villages get electricity - if they get it at all - only after dark. A lot of pumpsets are switched on in the first hours of the day. With power getting more plentiful, rural India should get electricity through the day.

Once that happens, small scale industrial units which need farm inputs, can get established in the hinterland, rather than in cities. Once these farm-industry units get started, their operations will add a few percentage points to our growth numbers.

Even though things like solar energy are highly subsidized by the government, you won't find folks in cities using it. But venture out - to places in the Himalayas or on islands in the mighty Brahmaputra - and you'll find plenty of people using solar panels connected to battery units to store electricity at daytime for use at night. Ironically, the spread of clean energy is being driven by the absence of power from the national grid.

Most forecasts about India's growth to 2020 are reassuringly positive. But that's no guarantee that this growth will take place and boost the well-being of more and more Indians. We'll need very smart policies geared to our peculiar needs, implemented well, to get us there.