Outlook for Indian Economy

ESSAY : Outlook for Indian Economy over the next 2-5 years

Background on Indian Economy:

It is a well known universal fact, that currently, India is the second largest developing economy in the world behind China. The road to establishing the current position was not smooth, with hurdles faced by the economists during every reform announced by them since the 1980s. Indian economy saw a paradigm shift in its momentum in the late 1980s, when the then Finance minister Manmohan Singh emphasized the need for globalisation and opened the doors to various foreign companies to invest in several industries. As part of the overall reforms, various Public Sector Undertakings ('PSU') were privatised and foreign ownership was allowed subject to Foregin Direct Investment ('FDI') norms for the specific industry.

One of the greatest assets for India has always been its cheap labour force and in the early 1990s, a majority of this force represented educated middle class people who had started to change their mentality that working for the private sector was equally enriching and secure as working for the PSUs. Hence, global MNC's were able to set up shops in India as they had quality work force that could service their requirements at cheap prices. This served well for the growth of the Indian economy for close to couple of decades from the 1990s as the boom in the Information Technology ('IT')industry coincided well with the availability of quality labour force at cheap rates.

Also, in the early 2000, most of the companies or large organisations in USA had started to downsize costs and were looking at cheaper alternatives to service their customers. The Indian business market made use of this opportunity well by opening Business Process Outsourcing ('BPO') centers across the whole of India providing quality employees who could communicate in English at at prices that would reduce the companies cost by close to 80%. The BPO boom started in the early 2000 and has been continuing for a decade.

Outlook for the next 2-5 years:

Indian economy's outlook for the next 2-5 years has been tried to be analysed from an indsutry perspective with specific