India's growth has slowed, foreign direct investment has plummeted, and its currency is sinking. After two decades of impressive growth, optimism appears to have ebbed. In the minds of many, India's shine has dimmed.
But today's woes are a mere bump. Consider the long-term potential. India can become economically developed by 2050 if it maintains a GDP growth of 5.5 to 6%. India has lot more positives going forward, even more than China. India's sustained economic growth, entrepreneurial society and young population have it poised to become an economic superpower. With its vibrant democracy and free press, the country provides an alternative to China, if it can overcome daunting challenges.
There are several impediments which India faces in its quest to become economic superpower. The first will be educating the country's masses of young people. Although India has some of good engineering and business schools, the overall level of adult literacy is pitifully low at about 63%. The bulk of the work here will need to be done by the private sector. As 3G and 4G wireless technologies get rolled out nationwide and as low-cost tablet computers become commonplace, there will be unparalleled opportunities for the private sector to bring outstanding self-learning material to even the remotest villages.
The second major challenge is the scourge of corruption. While corruption always leads to misallocation of resources, in a country such as India its effect can be particularly nasty as it leads to massive exploitation of the very poor who have almost no power to pass on the costs of corruption to third parties.
The third major challenge is the imperative for much greater efficiency in using resources, especially in energy. India relies on imports for a very huge proportion of its oil and gas needs than any other large emerging economy, including China. As India's economy continues its rapid growth, the energy situation is likely to get even more challenging.
In conclusion, India indeed has all the human and material resources that are required to become a superpower. There are challenges and roadblocks, no doubt. But better governance and meaningful reforms can help us get over them.