Can India’s high growth continue? No. Last year India produced goods and services worth $1.2 trillion. This is around Rs50,000 per Indian. Of this, 54% came from services, 29% from industry and 17% from agriculture. Services include trade, transportation, hospitality, mobile telephony, and software and outsourcing. Industry means things such as manufacturing, mining and energy.
Of every 100 Indians, 60 depend on agriculture. The Indian farmer is unproductive. We are self-sufficient in agriculture, but what this means is that 60% of the population feeds 100%. So each farmer grows food for himself and less than one other person. America is also self-sufficient, but farming families are only 1.3% of population. To sustain growth, half a billion Indians will need to do something other than agriculture. But what?
China dominates industry, and India is a star in services.
Seventy per cent of India’s growth comes from services. Ten years ago, Wipro’s turnover was $150 million. Today it is $5 billion, TCS is $6 billion and Infosys is $4.5 billion. Software and outsourcing is only 7% of India’s GDP, but contributes 2% of overall growth. Soon this will become 3%. The IT-BPO sector is great: not polluting, not much bribing needed, and, because it’s urban, each job creates three indirect jobs.
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