India’s on the move

Being a member of the BRICS has helped India establish itself as a powerful emerging economy with a growing GDP and unprecedented levels of growth of its life expectancy and social well-being. BRICS is an acronym for an association of 5 emerging economies: Brazil, Russia, India, China and South Africa that all have a very large population and have the fastest growing economies in the world. With a GDP in 2016 of $2,288 bn US dollars (a 7.6% increase from last year) and the literacy rate up to 82%, India certainly is moving fast and is becoming more developed every year. For example, India’s GDP is higher that France’s GDP in 2015 and is catching up to countries such as Germany.

Companies all over the world have definitely noticed this and, as a result, the country is getting more opportunities that, in turn, could boost their development even more. A recent example of this would be that Apple is planning to start assembling their phones and later start manufacturing in Karnataka, a state in the south of the country. Although Apple hasn’t confirmed this, Priyank Kharge, minister of information technology and biotechnology in Karnataka, told the AFP news agency: “We have an understanding with Apple and we expect them to start manufacturing in Karnataka by the end of April.”

Unfortunately, the difference between the rural and urban population still remains unresolved as poor people in rural areas still face a lack of resources and opportunities and the gap between rich and poor is still overwhelming. As a result, there is a wide disparity and the differences between those well off and the people who struggle are more than evident. Therefore, the government already has plans to solve the issue. The administration plans to spend $7.09bn on a scheme that would offer every rural household 100 days of work each year and, as a result, people could have money to boost the local economy. Furthermore, funds have been allocated in order to improve roads, electricity, irrigation and access to housing and sanitation to the most rural areas so that rural spending and quality of life could be improved. There are also plans to halve taxes for the poorest percentage of the population.

Overall, the government plans to drive economic development to try to mitigate the current situation in India and to also reduce the negative effects of their decision to ban rupees in rural and semi-rural areas of India. This was such a bad idea as most transactions in these areas happen in cash, which has been in short supply since the rupee ban in November last year. If everything goes well, rural and farm spending would be increased by 24% as part of the administration’s strategy to double farm incomes over five years.

Nevertheless, in order for the plan to be successful, the country would still have to undertake many economic reforms in order to avoid the “leakage system” so the people who are most affected actually receive the help they need so desperately. Finally, top authorities would also have to plan and assort the adequate financial needs as accurately as possible as the government is planning to carry on many schemes and each one of them should receive the funds and time they need. As much as I admire plans to improve India’s rural areas, caution is needed, as all schemes should get sufficient money so that the whole country could really develop as a whole unit and to reduce the rural and urban inequalities.

Sources

http://www.bbc.com/news/business-38853640

http://www.bbc.com/news/world-asia-india-38828452

http://www.bbc.com/news/world-asia-india-38824368