In this essay for CNBC TV18's "Romancing the Decade", a book of essays by people who have been instrumental in building Brand India, Mr Kumar Mangalam Birla comments on India's growth in the decade gone by and shares his perspective for the one coming up. Read an excerpt below and follow the link to the full essay at the end of the excerpt.
Excerpt from the essay:
A decade is but a small speck in time and space of history. This is even more so when it comes to a land that has as rich a past as India has. Yet, for a nation born only sixty-two years ago, even a period as short as a decade can be quite transformational. Each of the last two decades has brought profound changes for India, and the next one will also see dramatic changes.
The resurgence
The first decade of this century (2000-10) has been a defining period for India in several ways. India has emerged as one of the world's new economic success stories. This was the decade when the long-term impact of the reforms that were started in 1991, began to snowball into a critical mass, making India one of the world's fastest growing economies. The decade also provided strong reassurance that a viable consensus about the broad economic direction had been worked out, across the political spectrum. This has brought about a welcome out, across the political spectrum. This has brought about a welcome degree of confidence that India will have reasonable stability in economic policy, notwithstanding occasional political uncertainties. Another positive trend of the decade was the rise in India's influence in the global community, as evidenced by the signing of the Indo-US nuclear deal, the forging of closer ties with the US, and India's growing voice in multilateral institutions, such as WTO and in economic blocks as ASEAN, and more recently in the newly constituted G20.
The standout achievement of the past decade has been the breakout of India's sustainable annual GDP growth rate from 5% plus, to above 8%. This was possible due to factors such as continuing liberalization, a high savings rate, robust entrepreneurial activity, FDI flows and financial sector was the major growth driver. Much progress was achieved in sectors as highways, telecom, airports, civil aviation and ports. In some critical sectors, notably power, the shortfall widened. Consider how far India has progressed on the liberalization road: the corporate tax rate, which was 45% at the start of the decade, was lowered to 30% by the middle of the decade, duty on non agricultural goods, which stood at 150% in 1991-92, has dropped to 10%. The cost of money has also declined: in 2000 the general lending rate of banks was around 16%: by the end of the decade it was around 11%.
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