India has emerged as a powerhouse in the world economy, with its large population, rapid expansion and investment in innovation.
As leaders from government, the private sector, academia and civil society gather in New Delhi for the World Economic Forum’s India Economic Summit, here are eight things you need to know:
1) The economy’s slowing but it’s still among the world’s fastest-growing
India’s central bank says growth is set to slow, due to a weakening of domestic and external demand, and that prompted it to revise down its growth projections for the year 2019-20 to 6.9% from 7%.
What is the World Economic Forum's India Economic Summit 2019?
Under the theme, Innovating for India: Strengthening South Asia, Impacting the World, the World Economic Forum's India Economic Summit 2019 will convene key leaders from government, the private sector, academia and civil society on 3-4 October to accelerate the adoption of Fourth Industrial Revolution technologies and boost the region’s dynamism.
Hosted in collaboration with the Confederation of Indian Industry (CII), the aim of the Summit is to enhance global growth by promoting collaboration among South Asian countries and the ASEAN economic bloc.
The meeting will address strategic issues of regional significance under four thematic pillars:
• The New Geopolitical Reality – Geopolitical shifts and the complexity of our global system
• The New Social System – Inequality, inclusive growth, health and nutrition
• The New Ecological System – Environment, pollution and climate change
• The New Technological System – The Fourth Industrial Revolution, science, innovation and entrepreneurship
Discover a few ways the Forum is creating impact across India.
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Even so, World Bank forecasts show the nation will still outpace other economies and that’s backed up by the International Monetary Fund’s latest projections, which see India growing 7% in 2019, and picking up to 7.2% in 2020.
The outlook is less certain, with Gerry Rice, the IMF’s Director of Communications saying recent growth in India has been “much weaker than expected” and “risks to the outlook are tilted to the downside.”
2) It’s set to become the most populous nation
In around 2027, India is projected to overtake China as the world’s most populous country, according to the United Nations, which also predicts that nine countries will make up more than half the projected growth of the global population between now and 2050.
India leads the way, followed by Nigeria, Pakistan, the Democratic Republic of the Congo, Ethiopia, the United Republic of Tanzania, Indonesia, Egypt and the US.
India also has the largest diaspora in the world, with around 18 million of its citizens living in other countries.
3) It’s making progress on competitiveness
While India ranks 58th in the World Economic Forum’s Global Competitiveness Report, it is making progress, climbing five places from 2017, the largest gain of any country in the G20.
“India is a remarkable example of a country that has been able to accelerate on the pathway to innovation,” the report says. Even so, “business dynamism is hampered by administrative hurdles.”
The report also says that while Indian companies can access the third largest market in the world, the country would benefit from increased trade openness and more widespread adoption of ICT technologies.
What do we mean by ‘competitiveness’?
What is economic competitiveness? The World Economic Forum, which has been measuring countries' competitiveness since 1979, defines it as: “the set of institutions, policies and factors that determine the level of productivity of a country." Other definitions exist, but all generally include the word “productivity”.
The Global Competitiveness Report is a tool to help governments, the private sector, and civil society work together to boost productivity and generate prosperity. Comparative analysis between countries allows leaders to gauge areas that need strengthening and build a coordinated response. It also helps identify best practices around the world.
The Global Competitive Index forms the basis of the report. It measures performance according to 114 indicators that influence a nation’s productivity. The latest edition covered 141 economies, accounting for over 98% of the world’s GDP.
Countries’ scores are based primarily on quantitative findings from internationally recognized agencies such as the International Monetary Fund and World Health Organization, with the addition of qualitative assessments from economic and social specialists and senior corporate executives.
4) It’s fostering innovation and start-ups
India has the third-largest start-up base in the world, according to a report from IT trade association NASSCOM. That equates to more than 4,750 technology start-ups and about 1,500 in 2018 alone, and the government says it wants to foster more.
5) Some people are getting wealthier
Entrepreneurship will help contribute to strong growth in private wealth, according to AfrAsia Bank’s Global Wealth Migration Review 2019, which forecasts 10-year wealth growth of 180% in India, faster than other nations including China.
6) There’s still work to do on poverty
India has reduced absolute poverty, World Bank statistics show, with one measure declining to 13% in 2015, from 22% in 2011/12. Even so, poverty is still a central issue for the country, with the latest estimates showing that 176 million Indians were living in extreme poverty in 2015.
The Forum’s Inclusive Development Index notes that, while poverty has declined over the past five years, 6 out of 10 Indians still live on less than $3.20 per day. It says “there is substantial scope for improvement for India in this aspect.”
The International Monetary Fund has noted the progress made in India and the number of people lifted out of poverty, while stressing the importance of modernizing labor laws and regulations and other measures to help increase formal employment, particularly the employment of women.
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7) And on equality
India has a 33% gender gap that’s yet to be bridged, according to the World Economic Forum’s Gender Gap report. It ranks third-lowest in the world on Health and Survival for women.
Inclusivity and other themes are on the agenda at the India Economic Summit, which will host discussions on policy, business models and guidelines to bolster India’s dynamism and help it attain its full potential.