annual report1-final.qxd - Overseas Indian

Roundtable 2
regulatory framework. !
ROUND TABLE II
INDIA: ECONOMIC POWERHOUSE
Chair:
Speaker:
Suresh Prabhu,
Member of
Parliament
Roopa Purushottam,
Goldman Sachs
Roopa Purushothaman presented the BRIC report,
which focused on a dramatically different global economy.
The objective of the report was to understand
shifts in global spending power and foresaw a 50-year
roadmap of growth and incomes.
It further mentioned that the BRIC economies (Brazil,
Russia, India and China) could be larger than the G6 in
USD terms in less than 40 years while China could
overtake the U.S. as the world’s largest economy in a little
over 30 years. Of the current G6, only the U.S. and
Japan might be among the six largest economies in
2050. She said that new demand from the BRIC
economies could rival the current G6 within a decade
and dwarf it by 2050. However, individuals in BRIC are
still likely to be poorer on average than individuals in
the G6 economies, except in Russia. Therefore, she suggested
that there was a need for some basic conditions.
These were sound and stable macroeconomic policies,
strong political institutions, openness and high levels of
education. India had the most work to do in broadening
education, she reminded.
While looking at the investment scenario,
Purushottam mentioned that in India, trade share was
low but rising in respect to other BRICs. Though the
service sector was growing, it would still not solve the
problem. Even IT share was small. In coming years,
there could be some positive spillovers, but employment
would remain an issue. While comparing China
and India, Purushottam highlighted that there were
many similarities in both the countries like impressive
growth performance over the past decade, massive
labour force potential, strong diasporas to participate in
economic development.
However there were also stark contrasts between the
two — like India focusing on services instead of manufacturing.
There was also the problem of contrasting
political structures as well as different approaches to
investment. India was about 10-15 years behind China
in the process, she said.
She summed up the presentation by saying that
India’s growth rate remained above five percent
throughout the period. India’s GDP would outstrip that
of Japan by 2032. Though India’s income per capita in
2050 would rise to 35 times from the current levels, still
it would be significantly lower than the other countries.
Hence, critical issues for sustainable development are
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