India is poised to become the most populous country in the world in the next few decades, and the rapidly growing country is now the 10th largest economy in the world in terms of GDP. Mihaylo Economics Professor Dipankar Purkayastha discusses the current state and outlook for the Indian economy and the other nations that make up the Indian Subcontinent, including Pakistan, Sri Lanka and Bangladesh.
With a population of more than 1.5 billion people, or more than 20% of the world’s total population, the nations that make up the Indian Subcontinent comprise a rapidly expanding economic region. The Indian Subcontinent is a region of South Asia, including the nations of India, Sri Lanka, Pakistan, Nepal, Bhutan, the Maldives and Bangladesh. Foremost among the nations of the region is India with a rapidly growing population of more than 1.2 billion and an economy that ranks as the world’s 10th largest in terms of GDP.
“India is so large, that almost everything you say about it proves to be untrue,” says Mihaylo Economics Professor Dipankar Purkayastha. He studies economic development and international trade and is originally from India. “Some Indians are rich, but the vast majority of Indians are poor, and the presence of wealthy Indians makes averages misleading,” he explains.
A Legacy of Economic Leadership Precedes India’s Recent Rise
India’s position as a vital player in the world economy is both a recent development and a continuation of a long history for that nation. During ancient times, there was a lively trade between the major western empires of the time, including the Roman Empire, and India. The late economic historian Angus Maddison suggested that India may have been the world’s largest single economy during the first millennium A.D. During the Mughal Empire (1526-1857), India’s economy is believed to have contributed around one-fourth of the total global GDP.
Modern India’s economy has expanded exponentially since achieving independence from Great Britain in 1947. While initially adapting socialism to direct the country’s economic policy, India turned to free-market capitalism in the 1990s.
“Thirty years ago, India was growing at 2% to 3% annually, while today it is growing at 6% to 7%,” Purkayastha explains. “If this growth continues, it will be favorable for the Indian economy.” Yet the vast majority of Indians live in desperate poverty and hundreds of millions lack basic necessities.
India: An Incredibly Diverse Democracy
Nowhere is India’s diversity more apparent than in the multitude of languages spoken in the country. According to the nation’s 2001 census, India had 122 languages spoken by more than 10,000 people. Due to the country’s history as a British colony, English is one of the major languages. “This is a plus for the 100 million Indians that speak English, since it is the major international business language, but a minus for the rest of the population,” Purkayastha explains, since there is little incentive to translate books and instructional materials into local languages. “However, the fact that there are many English speakers in India cannot hurt the country in the long term, since English speakers can teach their fellow Indians.”
While India might seem to be worlds away from the economically developed United States, Purkayastha wants business students to know that the country is in many ways similar to America. “India has incredible diversity; it is like a poor version of the United States,” he says. “Indians and Americans share many values; India is the world’s largest democracy, and there is relative freedom of the press.”
India’s dominant impact on the world economy at present is in the service sector with the software industry and medical tourism particularly strong areas. The country is currently attempting to develop itself as a major manufacturer, noting the success of its Asian neighbors in developing employment through manufacturing. “India went from agriculture directly to services, unlike China and other countries in East Asia, which developed as manufacturing economies on their way to becoming service economies,” Purkayastha explains.
The Other Countries of the Subcontinent
While India is South Asia’s major contributor to the world economy, the other nations of the region, notably Pakistan and Bangladesh, also rank among the world’s most populous countries. All of the nations of South Asia share a commonality of formerly being British colonies. Purkayastha notes that Sri Lanka is richer than India, has a high literacy rate and has many positive social indicators. Bangladesh, on the other hand, has a declining fertility rate, but the vast majority of its citizens are very poor and the country faces periodic natural disasters that could worsen in the future due to climate change. Pakistan faces geopolitical pressures and has the internal hurdle of having a military-dominated government.
The Mihaylo College Impact on the Indian Subcontinent
Mihaylo College regularly collaborates with educational institutions in India. The college has long hosted many international students from that nation and throughout South Asia. Mihaylo ISDS Professor Rahul Bhaskar now offers real-time collaboration between Mihaylo students and their counterparts at the Indian Institute of Management in Ahmedabad, India, in his graduate-level ISDS 556- Data Warehousing and Foundations of Business Intelligence course, providing a novel opportunity for cross-cultural communication.
For daily economic news from the Indian Subcontinent, students might consult the Business Standard. For more on the region’s economy, students may consult The Indian Journal of Economics for commentary and perspective. For a brief overview of India’s geography, history, culture and economy, consult India: A Global Studies Handbook by Frtiz Blackwell.