Unlike China, India’s economy grew slowly for many years, with GDP growth averaging just 1.6 percent a year per capita from Independence through the mid-1980s. From then until 1990 GDP growth averaged 2.6 percent[1].
From 1991-1993, India went through substantial policy liberalization, which resulted in the rate of GDP growth reaching up to 4.2 percent per capita per year. India is still no economic miracle, but it is certainly exhibiting a healthier growth than in earlier years[2].
India has done well in these circumstances to see the proportion of population below the poverty line decline from around 45 percent in 1980 to 26 percent in 2000. Life expectancy has risen more than 25 percent between 1980 and 1998, from 50 to 63 years[3].
These successes, combined with the high rate of population growth, will place a great deal of strain on future labor productivity. The labor force is currently expanding at similar rate as before 1990s. In the recent past, India has derived much of its improved growth rate from improvements in labor productivity, illustrating the vital role productivity improvements play in its economy.
Growth will also be difficult to maintain without large improvements in infrastructure. Various articles on Internet reveal that there are a lot of challenges for getting skilled labor for infrastructure projects. Because of this, most of the projects are being delayed. Implementation of these as well introduces additional challenges. The system is not organized for this kind of growth or for such implementation of projects. India has to strengthen the whole system.
[1] Wikipedia
[3] “World Economic Outlook Database”. International Monetary Fund. http://www.imf.org/
