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India's per capita income likely to double in nine years
NEW DELHI: India's per capita income, which was put at $982 during 2009-10, is expected to double in nine years if the country's economy continued to expand at present growth rate, according to an official.
"With the current growth rate, per capita income of India will get doubled in nine years," India's Planning Commission Deputy Chairman Montek Singh Ahluwalia said while addressing an event in Noida.
India's gross domestic product, that grew 7.4 percent in 2009-10, witnessed an 8.9 percent growth in the first half this fiscal against the government estimate of 8.5 percent.
Ahluwalia said the current task is to see whether during the 12th plan period, the GDP growth rate of nine or 10 percent could be achieved.
"Even if we manage to keep nine percent, which actually we have achieved in the past, and the population growth is now probably going to be less than 1.5 percent, PCI will grow at more than 7.5 percent or so. When PCI grows at 7.5 percent, then it doubles in nine years and if that were to continue, then it is easy to see that PCI will quadruple in 18 years and will increase eight fold in 27 years," said Ahluwalia.
"It is actually a huge change and you have to cope with this change much faster. The products and technologies that will be demanded probably cannot be imagined today," he added.
"Even though we believe the world will grow a little more slowly for the next few years than in the past, India can still do nine percent because it will take care of its demand problem," said Ahluwalia.
"In 1963, the economy was growing at a rate of 3.5 percent per year and continued for the next 15-16 years. When an economy grows at 3.5 percent in terms of GDP and the population growth is over two percent, which it was at that time, the per capita income in such an economy is actually growing at less than 1.5 percent," said Ahluwalia.
"When PCI grows at 1.5 percent, it takes 45 years for per capita income (PCI) to double. I think, the doubling of PCI is very important. It is much more important than doubling of the total GDP, then only the economy will change," he added.
While both the manufacturing and services industries are expanding by almost 10 percent, agriculture output has jumped more than three percent to 4.4 percent on the back of a good monsoon season as domestic consumption remains strong.
The government expects these positive indicators to drive economic growth to 8.5 percent by the end of fiscal 2010.
But things are not as rosy as they appear. The widening current account deficit - the gap between imports and exports - is likely exceed three percent of the GDP next year.
Similarly, the inflation rate is expected to remains high at more than seven percent and the pressure on prices is expected to keep driving up interest rates next year.
Slowing demand from Western countries, due to slow pace of economic recovery, could hurt India's services sector in the long run. Foreign direct investment in India is also witnessing steady decline over the last few months, according to recent reports.
http://arabnews.com/economy/article218586.ece?comments=all
NEW DELHI: India's per capita income, which was put at $982 during 2009-10, is expected to double in nine years if the country's economy continued to expand at present growth rate, according to an official.
"With the current growth rate, per capita income of India will get doubled in nine years," India's Planning Commission Deputy Chairman Montek Singh Ahluwalia said while addressing an event in Noida.
India's gross domestic product, that grew 7.4 percent in 2009-10, witnessed an 8.9 percent growth in the first half this fiscal against the government estimate of 8.5 percent.
Ahluwalia said the current task is to see whether during the 12th plan period, the GDP growth rate of nine or 10 percent could be achieved.
"Even if we manage to keep nine percent, which actually we have achieved in the past, and the population growth is now probably going to be less than 1.5 percent, PCI will grow at more than 7.5 percent or so. When PCI grows at 7.5 percent, then it doubles in nine years and if that were to continue, then it is easy to see that PCI will quadruple in 18 years and will increase eight fold in 27 years," said Ahluwalia.
"It is actually a huge change and you have to cope with this change much faster. The products and technologies that will be demanded probably cannot be imagined today," he added.
"Even though we believe the world will grow a little more slowly for the next few years than in the past, India can still do nine percent because it will take care of its demand problem," said Ahluwalia.
"In 1963, the economy was growing at a rate of 3.5 percent per year and continued for the next 15-16 years. When an economy grows at 3.5 percent in terms of GDP and the population growth is over two percent, which it was at that time, the per capita income in such an economy is actually growing at less than 1.5 percent," said Ahluwalia.
"When PCI grows at 1.5 percent, it takes 45 years for per capita income (PCI) to double. I think, the doubling of PCI is very important. It is much more important than doubling of the total GDP, then only the economy will change," he added.
While both the manufacturing and services industries are expanding by almost 10 percent, agriculture output has jumped more than three percent to 4.4 percent on the back of a good monsoon season as domestic consumption remains strong.
The government expects these positive indicators to drive economic growth to 8.5 percent by the end of fiscal 2010.
But things are not as rosy as they appear. The widening current account deficit - the gap between imports and exports - is likely exceed three percent of the GDP next year.
Similarly, the inflation rate is expected to remains high at more than seven percent and the pressure on prices is expected to keep driving up interest rates next year.
Slowing demand from Western countries, due to slow pace of economic recovery, could hurt India's services sector in the long run. Foreign direct investment in India is also witnessing steady decline over the last few months, according to recent reports.
http://arabnews.com/economy/article218586.ece?comments=all