http://www.telegraph.co.uk/opinion/main.jhtml;jsessionid=J4LB13CHLPDCJQFIQMGCM5OAVCBQUJVC?xml=/opinion/2005/08/04/dl0402.xml&sSheet=/news/2005/08/04/ixworld.html India on the rise (Filed: 04/08/2005)
The launch in India of a personal computer for only £130 is a mark of how the economy of that country has been transformed over the past generation. As Peter Foster, our South Asia Correspondent, writes in today's paper, its advent could herald an explosion in "cyber connectivity" similar to that which has already hit the mobile-phone market. India is living up to its reputation as a developing nation with a sensational information-technology sector. Is it thereby on the way to becoming a global economic giant? Here, the comparisons with its great Asian rival are not encouraging. While India has achieved six per cent annual growth since the late 1980s, thanks to the gradual dismantling of the "licence raj" regime, China's figure has been 10 per cent since 1981. In the 1990s, foreign direct investment in China was 10 times that in India. The upshot is that fewer than five per cent of Chinese now live below the poverty line, compared with 26 per cent in India. To build on the potential that its IT expertise promises, India still has major problems to overcome. Restrictive labour laws and an aversion to foreign investment are holding back growth in the manufacturing industry, which could draw off the land some of the 60 per cent of the population dependent on farming for a living. The infrastructure - roads, ports, airports, power supply - remains lamentable. And even the IT industry is hampered by the small proportion of people who receive higher education. Having set India on the road to more rapid growth in the early 1990s, Manmohan Singh, the prime minister, deserves his reputation as an economic reformer. But he heads a minority government dependent on the Left to get its way in parliament. His predicament is illustrated by a Bill before the Lok Sabha that would guarantee a minimum 100 days of work a year in rural areas, a measure that smacks of the command rather than the liberalised economy. India has the basic ingredients for success - a stable democracy and a hard-working labour force eager to improve its lot. But its elderly political elite is too attached to a Fabian-tinged "Indian way" that holds back its would-be entrepreneurs. That cussedness stands between respectable economic progress and a breakthrough into China's league. -- Cheers, Gabe Menezes. London, England