How can we make India the largest economy in the world?
Let's do the calculations bottom down. World's largest economy of United States has a GDP of about $15 trillion. You can imagine GDP to be the sum total of incomes of all the people in that country.
To be the largest economy now, an average Indian has to make $13,000 per year [Rs. 8.5 lakhs/yr], so that the 1.2 billion Indians will together make more than $15 trillion. [At present, an average Indian makes about a third of that if you adjust to purchase power parity or about a eighth of that amount if you look at just the dollar figures.]
Almost everywhere in the developed world, workers make more than $30,000/year on an average. Even the minimum wages is way more than $13,000 in most developed countries. And a large chunk of educated Indians do make more than $13000/yr. And a lot of the Indians in the US make 10 times that level and believe me most of them are not geniuses.
Thus, the question is how do we get an average Indian to earn at the level of an average minimum wage worker in the US, Japan or Western Europe. Of course, some will make a lot more than that and some will be unemployed, imprisoned or in a hospital bed.
- Education for everyone. Almost everyone in Sweden or any other developed country finishes high school and that is the first bar we have to cross. Get every Indian child study all the way until high school [a large number drop out currently].
- Well thought out out school education. There are two main purposes of education - to expand your mind and to get ready for job. Indian schools need not become like MIT Media Lab, but the minimum they are expected to do is teach reading/mathematics/logic with a high level of proficiency. We can learn a lot from Finland on this - Why Are Finland's Schools Successful? - and this is not rocket science to teach people good reading and maths skills.
- Good technical and vocational schools. College should not be the default option for most. In Germany, a lot of the students go to quality vocational schools that prepares them for industry. Unless someone goes on to become a researcher, professor, doctor or other related professions, they should be trained through these vocational schools so that we have well trained workers who can get high end industry jobs.
Get workers ready
- Unfit workers are not going to take the world by storm. When a sizable chunk of our workers are undernourished and sleep in platforms & shanties, they are not going to earn $13000. State governments should have free hostels where any worker can get free food, clean lodging and basic healthcare - no questions asked. It is not charity - governments can make far more than that with more taxes paid by these healthier workers.
- Much more responsive training & placement: Government should have its own LinkedIn kind of tool, replacing the current unemployment exchanges, where it can keep track of what skills are needed in the market and what workers have them. Depending on changing needs, they should be able to quickly train the workers and place them. If companies need workers for 3d printing, the program should be able to create an army of them in a couple of months - it has to be that snap & responsive.
Make it easy to do business
Workers can get paid only when there are businesses that can hire them. Some people think of Scandinavian countries as socialist nations. That is far from truth - those countries are capitalist dynamos as seen from World Bank rankings - Doing Business in Sweden - or the economic freedom index - Country Rankings.
- Lot more courts and a lot less laws. We have way too many regulations and way too less courts to enforce them. When a business is embroiled in a court dispute, it takes years to solve them and that makes companies very afraid of opening business in India.
- More regulations on bankruptcy and contracts. These are still in works in India. Doing Business in India
- Make it easy to follow laws. In India it is very hard to even file business taxes and cross-border transactions are even hard. Compare the cost of exporting or importing anything: Doing Business in India
- Make it easy to buy, register or sell property. Land records have to be transparent.
Keep stuff moving
Modern businesses can run only where stuff move fast. Our lorries move at a snail's space through the rickety roads. We have to move people and factories around super speed links in rail, road and coastal networks. A lot of manufacturing companies got created in the US mainly because of the extensive water networks that moved stuff extremely cheap around the country - through Erie Canal, Mississippi and others [Did America’s Rivers Make It A Superpower?]
We need to have an extensive coastal network from Gujarat to Bengal, where stuff moves extremely fast & cheap along the coasts and with a lot of new cities & infrastructure moved along this coastal way.
See more here: India Dreams Collection