The document summarizes India's economic growth and development over the past few decades and looks ahead to its future. It notes that India has experienced high GDP growth averaging around 7-8% annually since the 1980s. This growth has been led by domestic factors rather than exports and has been driven by services, consumption, and investment. It predicts that India will continue growing at 7-8% annually and will see rising prosperity and a growing middle class in the coming decades, positioning it to become a major global economic power by the mid-century. However, it also points out weaknesses like poor governance that could potentially threaten continued growth if not addressed.

1. INDIA’S FUTURE Or prosperity will spread in India but happiness will not, until we fix governance by Gurcharan Das Author Ex CEO Procter & Gamble India

3. Even though the world has just discovered it, the India growth story is not new It has been going on for 25 years

4. What is the India story?

5. 28 years of high growth 1.0 3.5 6.0 8.9 (%) Average annual GDP growth 0 2 4 6 8 10 1900-1950 1950-1980 1980-2002 2002-2007

6. Population growth is slowing Sources: 1900-1990: Angus Maddison (1995), Monitoring the World Economy, 1990-2000:Census of India (2001) 1.0 2.2 2.1 1.8 1.5 (%) 0 0.5 1.0 1.5 2.0 2.5 1901-1950 1951-1980 1981-1990 1991-2000 2001-2010

7. Literacy is rising Source: Census of India (2001) 17 52 65 80 (%) 0 20 40 60 80 100 1950 1990 2000 2010 (proj)

8. When middle class is 50% then the politics will also change Source: The Consuming Class, National Council of Applied Economic Research, 2002 65 220 368 8% 22% 32% 0 100 200 300 400 1980 2000 2010 (m)

9. Poverty is declining 46 26 16 1% of the people have been crossing poverty line each year for 25 years Equals ~ 200m (%) 0 10 20 30 40 50 1980 2000 2010

10. Per capita income gains Source: World Bank US$ ppp 2005 3,051 1980 1,178

12. The India model is unique

19. Implication of India model – Consumption led People Friendly: Consumption as % of GDP People Friendly, Less inequality: Gini Index Will India become the next big consuming economy after the U.S.? 41% 45% 59% U.S. China Brazil India 33% 58% 42% 64% Europe China India

20. Reasons for success India’s success is market-led whereas China’s is state induced The entrepreneur is at the centre of the Indian model

21. Rise of globally competitive Indian companies

31. The economy grows at night when the government is asleep

35. “ By 2010 India will have world’s largest number of English speakers” “When 300 million Indians speak a word in a certain way, that will be the way to speak it.” Professor David Crystal Cambridge Encyclopedia of the English Language

39. Per capita income 2,100 3,050 5,800 16,800 37,000 On a ppp basis 2000 2005 2020 2040 2066 0 10 20 30 40 ($000)

41. India will gradually turn middle-class 50% 50% 8% 22% 32% West of the Kanpur- Chennai line East of the Kanpur- Chennai line Chennai Kanpur- 1980 2000 2010 2020 2040

47. The Wise Elephant