Student Forum Posted on May 14, 2019
What is Holding India Back from Becoming a World Superpower?
Sol-Marie Quintero
Time Magazine names economic, military, political influence, innovation and culture/lifestyle as tenets by which to determine a global 'superpower'. By this definition, a superpower exercises worldwide influence by way of its military, political, and economic wealth. Theorists from developed and developing nations have published contrasting philosophies on India's potential to achieve this status through these avenues. However, while India's economy and influence might be on the rise, analysts must consider hindrances to becoming a 'superpower', including limited Gross Domestic Product (GDP) growth. If India seeks superpower status, it must exponentially develop its global influence through tenets demarcated through Time, to address its obstacles of disguised unemployment, minimal potential for wage growth, and large dependency on the nation's natural resources.
Although credited as one of the fastest growing economies in the world, India's economy suffers from uneven development; although the rate of growth is growing, the level of growth is not even across all sectors. Countries with developed economies, infrastructure, and high GDP relative to other nations have a manageable, productive, sizable population. These populations are expected to thrive under political cohesion and generate growing numbers of Gross Domestic Product and Gross National Product as measures to demonstrate production within a nation. This is however, not the case in India. About 60% of India's nearly 1.3 billion people live on less than $3.10 a day, the World Bank's median poverty line; 21%, or more than 250 million people, survive on less than $2 a day. More than 90 percent of the workforce employed in the informal sector remains without access to employer securities and benefits.
Opportunity for growth becomes hindered when over-employment with various sectors leads to what is widely known as disguised unemployment. While most people are employed, there is a minuscule opportunity for wage growth, and thus economic growth has lagged. GDP growth rates have not actually improved the outlook for living standards; though economic growth has enhanced the overall standard of living, India has the largest number of persons living below the poverty line. India's jobs have been unable to match the 1.2 billion population regardless of economic growth. In India, the lack of specialization and thus unskilled population continues to grow, which threatens not only social cohesion but ensures that politics in India remain inaccessible to the poor. This can be seen due to the growing disparity of income distribution, which plagues the nation: today, the richest 10% in India controls 80% of the nation's wealth. The top 1% owns 58% of India's wealth (by comparison, the richest 1% in the United States owns 37% of the wealth). To maintain hope for financial growth that could place India as part of the ranks of world superpowers, the nation would need to become less dependent on revenue from natural resources, mainly consisting of agriculture and traditional farming for development. In essence, it would need to ensure that growth is accessible to all sectors of the Indian economy, not simply those with previous access to the GDP growth.
But India's growth cannot be evenly distributed without focusing on the aspect of its economy driven by the poor. While agriculture remains the main resource for economic growth, large dependence on it remains a limitation for financial progression. With a population of over one billion, over 70% of people live in rural areas and 90% of their income is generated from agriculture and natural resources. Stagnation in agricultural growth has resulted in additional destabilization of the rural populations who are dependent on this aspect of GDP. Moreover, its contribution to the Gross National Product is only 27-30%. Though GDP growth is at 6.6%, India's GDP of 2.597 trillion USD will require changes so that it can reach China's 13 trillion USD or the United States' 20 trillion.
If the informal labor sector diversifies and specializes, industrialization rises, and political relations with wealthy nations can improve, India's economy can grow substantial proportions that would result in essential GDP increase. To bridge gaps of inequity, it could be helpful for India to do more work in its rural areas and raise its Gross National Product, as a way to outsource its resources for national benefit. Ultimately, elevation of disadvantaged groups could assist with uniting India into fighting in solidarity towards social progress, as developing the nation's people could help with economic growth and assist with India's goal of becoming a superpower.
The writing and opinions expressed herein are those of the authors and do not necessarily reflect the positions of the Roosevelt House Public Policy Institute or Hunter College.
Roosevelt House Public Policy Institute at Hunter CollegeStudent Forum What is Holding India Back from Becoming a World Superpower?