Many observers have commented that the 21st century belongs to India (and China). Since economics is increasingly becoming the currency of power, this statement acknowledges the changing balance of power in the world and is a tribute to the growing economic muscle of India.
Since the 1990s India is on a new economic path. The forecast was that by 2020, its economy would treble and by 2050 it should leave the US economy behind. That surely implies that India will by then be seated on the high table because with economic power will also come the political strength. As a result courting of India by other powers has already begun.
Pakistans campaign of terror against India was never condemned by the US in terms that would have required Pakistan to change its ways. Taking all this into consideration, it would be wise to treat USs current interest in India as arising out of compulsions of its own national interests and no more.
Globalization, with new inter-connectivity and fillip to trade through opening of markets, has brought new prosperity to India. Liberalization enabled India’s economic revolution to match the levels achieved by the East Asian Tigers.
The credit for the new economic momentum goes to Prime Minister PV Narsimha Rao. All subsequent Central Governments of India followed his lead. The years 2003–07 recorded a big surge in the economy which touched 9.4 percent of the GDP in 2006–07. Unfortunately, the subprime mortgage crisis of 2008 in the US has triggered a world recession which will drop India’s growth during 2008–09 to 7 percent or near about.
India’s economic fundamentals are now very sound which should enable it to get back to its accelerated growth by 2010–11 at the latest. But for this hiccup, thanks to the financial breakthrough achieved in the previous five years, Indian economy was expected to double every eight years. At this rate India was destined to become the fifth largest consumer market in the world. India’s status then would not be high just in Asia, but in the entire world.
The drawback was that the new prosperity was not reaching all sections of people in India. The rich were becoming richer, the poor remaining poor. Inequality between the urban and rural areas was widening. It is also going to have a spatial north-south divide with southern states and the west moving far ahead of the rest of the country causing an imbalance that may move people towards these regions.
Social and political changes were not keeping pace with the economic growth. Estimates were that in 2004–05, 33.6 percent of people were living on less than $1 per day. The state continuously failed to deliver to the people on basic issues of health, education, employment and infrastructure. In a sense the economic miracle was also creating transformational disruption. Naxalism which started as a revolt against the state for its political and economic policies from a village called Naxalbari in the Darjeeling district of West Bengal in 1965 has spread to 16 states, affecting more than 150 districts. Lobbying for power on the basis of caste has fragmented Indian politics.
The Indian growth story is, thus, not a smooth process. India’s future trajectory on the power graph will depend upon how the impediments to economic growth get removed and with what success. Apart from societal ones, the impediments lie scattered in several sectors – notably governance and regulatory. Corruption has consistently remained one of the main causes for failure of delivery.
The most damaging anti-Indian action by China has been to setup Pakistan as its Israel. The Pakistani nuclear weapons program which is India specific was guided, nurtured, equipped and overseen by China.
The Government, however, is doing its best to surmount these obstacles so that economic growth can be sustained at the levels already achieved and the nation building programs do not falter. There is a heavy accent on expansion of education and infrastructure. New job opportunities are being created and it is hoped that in time, more people, employed presently in agriculture and related activities which are poorly paid will be able to join industry and businesses. What has been done and achieved still remains miniscule in comparison with what needs or remains to be done, but there is hope and confidence in the air that India is on the march ahead. With that India is acquiring a new vision of itself vis-a-vis the region and the world.
This vision, while keeping national security at the top, seeks to develop a cooperative and friendly attitude with all countries of the world. India has no hidden agenda but it is well aware that other nations may not feel equally benign towards it. Its nuclear program was designed to forestall any surprises from the neighborhood as well as to seek recognition that India is on its way to becoming a leading power of the world. Slowly, India is building a blue water navy with aircraft carriers and nuclear submarines which signify a high military status. It has the fourth largest army in the world. It has a powerful and advanced air fleet for defense. With its space and lunar programs and recent successful orbiting of the moon, it has sent a message that it is seriously developing its credentials as a global power. Its quest for permanent membership at the UN Security Council is to get the world to accept its status which its demography and economic growth entitles it to. In the field of IT its unique and worldwide standing has already been accepted.
India has always wanted an important role in the world. When the South Asian Association for Regional Cooperation (SAARC) was mooted, India was quick to join it, hoping that promotion of trade, business and cultural interaction would bring harmony and raise the living standards of the people in the region. But deeply held animosities within the region have come in the way of encouraging mutual dialogue beyond a threshold. In the meantime, the Association of South East Asian Nations (ASEAN) had been established (1967) as a forum for dialogue to prevent the compromise of the members’ national interest by what appeared to be predatory powers in the neighborhood – China and Japan and across the Pacific and the USA. Regional togetherness has made ASEAN countries close knit.
In 1993 a new entity, the Asean Regional Forum (ARF) came into existence which includes India as a member. The purpose was to keep taking stock of security related issues of the region, but the group has so far refrained from discussing any contentious issues. Yet another organization, the Shanghai Cooperation Organization (SCO) came up in 2006, pointedly for looking into issues of regional terrorism and Islamic extremism. India has an observer status with the SCO. East Asia Summit, set up in 2005, is the latest new entity with 16 members including India. It’s not yet clear what the East Asia Summit is set to achieve but one thing is clear – the emergence of these organizations signifies that the Asian countries increasingly feel the need for a collective identity to forge cooperative common policies which will keep in view the interests of each nation.