A Bumpier But Freer Road

This article explains the factors leading to India's growing economy. The recent boom in consulting firms are valued at $5 billion and are expected to jump to $30 billion within the next few years. Economists are also predicting the GDP to increase by 8.5% and expect India to be the fastest growing country in the next quarter century.

One of the reasons for such a spurge in growth is due to its large, rapidly growing young population. Tariff reforms in the 1990s has also allowed Indian businesses to compete in the global market. Another factor is India's economy is being driven by 45 million entrepreneurs, more than an other country. The large informal economy and lack of education for many Indians is leading its citizens to build their own businesses.

Despite all the reports indicating India's progress they country still has many obstacles to modernize itself. India's current urban infrastructure and roads are in poor condition. It is estimated that in order for the country to support its growing population it will need to spend $1.2 trillion dollars by 2030. Nearly forty percent of the population is illiterate and another forty percent is do not complete school. An uneducated and unskilled population is leaving many Indians unemployed and below poverty level. High levels of unemployment are also leading to high levels of corruption.

The end of the article discusses India's wild and unpredictable democracy. Government and policies are always changing. While reading this article I kept thinking of Milton Friedman's article "The Relationship between Economic Freedom and Political Freedom" assigned in cross sector analysis. While the economy has been booming it is leaving many people out of the race. I am curious to see how the government deals with a booming economy as well as to find opportunities to improve infrastructure, public schools, and corruption for the entire population.

http://www.economist.com/node/17145035