[Dec 2007, Volume 4 Quarterly Issue] Pdf File size - The IIPM Think ...

Lawrence Surendra,
Planning Commission of India Chair in
Economics, Department of Studies in
Economics and Cooperation,
University of Mysore
India’s Future – Knowledge And Learning
Societies Or Mere Markets And State
"Economics is not a body of concrete
wealth but an engine for
the discovery of concrete truth."
-Alfred Marshall
The Central Statistical Organization
in its estimate released on
May 21, 2007, estimated GDP at
factor cost at 1999 – 2000 prices as
Rs.28,482 billion. India’s GDP at factor
cost increased from US$20 billion in
1950-51 to US$828 billion in 2006-07.
GDP at current market prices was estimated
at US$912 billion in 2006-07. With
increasing integration, share of merchandise
trade (imports + exports) increased
from 12.2 percent of GDP in 1950-51 to
33.6 percent in 2006-07. Inclusion of
services will increase this share further.
As per the World Economic Outlook
(April 2007), India accounted for 6.3
percent of global GDP measured in terms
of Purchasing Power Parity (PPP) and
1.3 percent export of goods and services.
In terms of PPP, India’s GDP in 2006 was
valued at around US$ four trillion, nearly
five times the GDP valued at current
nominal exchange rate.
The figures in terms economic growth
are impressive with the Finance Minister
aiming for a growth rate of above 10 percent
(around 12 percent) next year. Ambitious
but very much in the realm of
possibility, if the Finance Minister plays
his hands well. For those who directly or
indirectly benefit by this growth, especially
the middle and upper middle classes,
this is news to cheer and feel gratified,
in the sense of feeling a sense of pleasure
and comfort. The latter sense of gratification
leads not only to the desire for
greater and greater gratification but also
leads to over-confidence and arrogance;
signs of the latter are plenty and all it requires
is to read the papers in the metros.
This arrogance around a growing economy
also leads to all kinds of fanciful assumptions
about the role of state and
markets and a kind of evangelical zeal
about markets. For those who will benefit
little or nothing by this growth and
for the many who may even become or
already are, victims of the rapid economic
growth, they may still hope that there
would be some protections for them and
that they still remain constitutionally
citizens of India with equal opportunities
16 THE IIPM THINK TANK