As indicated in the economics section of this blog, India has sustained economic growth upon liberalization of the country, but at a cost of uneven development between states. Even with my own experience in India, I learned that within-state development can be uneven as well (e.g. a thriving metropolis versus an underdeveloped hinterland). Thus, my development concerns for India will focus primarily on ensuring that both slower states and less-developed parts of high-performing states catch up for everyone’s benefit.
To start with, providing relevant education and skills to Indians will be imperative. India is in the midst of transitioning to a knowledge-based economy, with skilled workers who can drive growth and innovation. Some challenges include coordinating skill development within the government, prioritizing skill formation in both formal and informal education institutes, acknowledging the informal sector, and standardizing required skills by industry. The cost for education infrastructure is also enormous. However, the government is not alone, as both NGOs and private companies are doing their part to achieve these skill development needs.1
Furthermore, fostering more business and entrepreneurship will be important for Indian development. One key component is financing MSMEs (Micro, Small, and Medium Enterprises), a significant component of economic growth and poverty reduction. An ongoing World Bank project is focusing on increasing financial access for MSMEs, particularly in services and manufacturing. Notably, these businesses also matter to slower states as a good proportion of rural MSMEs are found there.2
Although both initiatives are crucial to India’s success, my concerns will still focus on ensuring that slower states and areas catch up to balance development across the country. Greater focus should be placed on developing skills and fostering entrepreneurship in the more underdeveloped parts of India while halting brain drain.
Footnotes
Hi Peter,
I found your blog post on India’s developmental concerns to be really interesting. I noted that you think economic growth and poverty reduction should be two key areas of focus for future developmental projects in India, which are currently being addressed by the Indian government by a World Bank project that focus’ on increasing financial access for MSME. Perhaps, you could look into a project similar to one implemented in the Philippines called “The Community Mortgage Programme”- this programs was highly successful in the Philippines and it worked by allowing families who were living illegally on land as squatters to legalize and upgrade squatters or relocate elsewhere by offering these families financial support in the form of long-term mortgage loans. Financial support is given by the government for land acquisition, infrastructure development and house construction without collateral, most importantly giving them access to credit, however, this is the limit of government involvement with the rest of the duties being decentralized and given to NGOs or local government units, this may work for India as I note from your blog that India has a vibrant civil society with over a million NGOs.
While this project doesn’t foster more business or entrepreneurship it I believe it can reduce poverty and increase economic growth by giving citizens access to credit.
Perhaps this is an area India and the Philippines can collaborate on.
Cheers,
Taz