India's+double-digit+growth+ambitions+fade

Title: ** India's double-digit growth ambitions fade ** Date of publication: 24 April 2011 Link: http://economictimes.indiatimes.com/news/economy/indicators/indias-double-digit-growth-ambitions-fade/articleshow/8070292.cms Although India has held hopes of attaining a double-digit economic growth, it looks as if this goal is becoming more difficult to achieve due to high inflation, a creaking infrastucture that is unable to handle huge economic expansion, but most importantly, a slow progress on reforming the amount of poverty that is still present witin the nation. According to statistics, “over 40% of India’s population live under the extreme poverty line”. The government is planning to try and take bigger steps in order to improve the situation by establishing better skills education for the population as well as putting in heavy investment to improve India’s infrastructure. Under an optimistic scenario, chief India economist Leif Eskesen makes a normative statement that: “growth could reach10 percent as soon as 2020.” India has already achieved an estimated 8.2% in average growth since the 1950’s, when it first became a free market economy. Based on the information above, it is likely that India is measuring its economic growth not solely on GDP. As you can see through the GDP graph (fig 1) below, India’s GDP has risen dramatically over the last 50 years due to its widespread spending in its expanding economy. Because this is the case, it can be assumed that GDP is not an accurate indicator of the amount of India’s economic growth, and that India measures growth also based on human development. In fig. 2, which is a graph that measures India’s life expectancy of the population against the income per capita, it can be illustrated that while there has been growth since the 1950’s, but the income per person is still less than half that of world’s most developed countries. Life expectancy is also lower than the majority of other countries in the world. The article also implies that India has a low standard of living due to bad infrastructure as well as low levels of education. This directly correlates to the human development index, which measures growth and development based on the three factors of longevity, education, and standard of living. Therefore, it can be assumed that India’s HDI is also extremely low. Based on India’s own statistics of economic growth, the low percentage of (8.2%) in average growth shows that India bases most of its measure on its HDI, and less on its GDP. Economic Growth: is the increase of per capita [|gross domestic product] (GDP) or other measures of aggregate income, typically reported as the annual rate of change in real GDP. GDP: Growth Development Product. The total value of all final goods and services produced in an economy in a year ** HDI - human development index: an index that includes data on the three basic goals of development: health, education, and standard of living. ** Investments: any use of resources intended to increase future production output or income. Infrastructure: The basic physical and organizational structures and facilities (e.g., buildings, roads, and power supplies) needed for the operation of a society or enterprise
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Fig 1: The GDP of India measured in U.S dollars. As it is indicated, the GDP has had a significant increase in the last 50 years. However, this is obviously not a good indicator of its economic growth because it does not take into account other factors of devleopment, such as the human standard of living. Fig 2. The HDI of India shows that the majority of its population is still under receiving lower-than-average wages. Life expectancy is also lower than that of other countries.

I agree with the majority of the article because the statistics that are being used to support its point are quite accurate. India does not measure its economic growth based solely on GDP, and also focuses on its human development index when determining growth. As mentioned before in class, the GDP does not nescessarily offer accurate decpictions of a nation's wealth because it is simply a measure of how much spending goes into the economy a year, whether it is because of negative or positive consequences, and the fact that India does take into account of its lower-than-majority living standard conditions means it has a more accurate projection of its economic growth. Based on Eskesen's normative statement that India will have a possibility of breaking the two digit barrier, I believe that this is only possible if the government takes effective measures to subsidize efforts to improve infrastructure. Economic growth will have little or no effect if the country does not have resources or technology to fully expand. Poverty, while being a more difficult issue to fix, can also be slightly alleviated if the government spent more of its money creating education centers as well as more human aid facilities. Overall, I believe that if the government spent more time putting investments in alleviating the three factors in determining human development--namely, standards of living (infrastructure), life expectancy (health care and human aid), and levels of education--India's economic growth will reach its goal of achieving two-digit growth.
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