What will be the economic future of India? For the past 5 to 7 years, you've heard that the surge of the Indian economy is right around the corner. They, like China, were right on the precipice of a great economic boom... right on the edge of being a premiere economic power. We've seen a large expansion in Chinese markets since the year 2000, but where is India? A lot of Americans immediately associate India with outsourced American telecom jobs, and while that is definately true... as with any nation, there is a wide array of other markets. With this potential bright new day, there are many internal debates in India, about what direction their nation will take.
If you compare India to the United States, you will see that India has three times the population, with only one third the land mass. So, with 9 times the potential population density, you will see that the ability to acquire commercial land will be of utmost importance... and difficult to come by.
But, can you force people to change? Can you make people living in Indian villages, who want to keep their traditional rural lifestyle... can you make them adapt? These questions have been asked in many countries over time, and it becomes even more precarious a situation, when you consider just how densely populated this country is. Will the Indian government allow these markets to grow in their country or watch them migrate to their Chinese neighbors to the East? China will be more than happy to take those opportunities off their hands.
Now, that is a DENSELY populated neighborhood! Remember, India has one billion people, second behind only China. There are industries that would like to move in and open local factories, but they are having difficulties acquiring land in many areas. Its like the nation is right on the cusp of an Industrial Revolution and for this reason, there have been innumerable land disputes (and reported violence in some instances) between private land owners and local government who want to give these global firms the ability to establish their coorporations in these local communities. It would create jobs and tax revenue, making it easier for government to improve roads, schools, hospitals, libraries and the like. So there is a tremendous potential upside for not only individuals who could take these jobs and increase their earning, but also for the community as a collective.
According to the Association of Indian Chambers of Commerce, there are approximately 200 various corporate projects (worth an estimated $100 billion in investment) that are currently being held up due to various types of land related issues. Will investors pull out? Will companies relocate? Will people living in poor slums and rural farms be forcibly removed from their homes? Case in point, Mumbai Airport has had designs for expansion for a couple years, but nothing has been done due to the fact that the airport currently borders a large slum area, and the tenants have refused to vacate the area. Do the local government go in with troops and clear the area? Not a very good way to win over voters for the next election cycle.
As rural India farmers blockade construction sites in some areas in an attempt to prevent corporations from tampering with their traditional cultural environment, will these economic opportunities ultimately go to China? China's population approximately two billion, twice the size of India... however, they have 280 million people currently working in factories, whereas India currently has 45 million. That will give you a comparative idea of the current underproduction. Their current industrial output is about the same as Spain's, a country of much smaller size and population. The entire nation is not rural, by no means. There are Indian cities that have been transformed by tech field and services. But tech can only do so much. There are currently 10million people (about 1% of total population) associated with tech in India, but in order to grow a large working class, a nation needs to produce... they need factories. Most present day Americans dont know the growth of the US middle class during the 40's and 50's, was due in large part to manufacturing... and we decline now as a lot of those high paying blue collar factory jobs have gone overseas. Japan can focus on tech, however, a large nation needs to produce.
But, can you force people to change? Can you make people living in Indian villages, who want to keep their traditional rural lifestyle... can you make them adapt? These questions have been asked in many countries over time, and it becomes even more precarious a situation, when you consider just how densely populated this country is. Will the Indian government allow these markets to grow in their country or watch them migrate to their Chinese neighbors to the East? China will be more than happy to take those opportunities off their hands.
And even if you're open to the possibility of change, where do you go when you're a farmer, you've always been a farmer and thats all you know? The government has offered free training in addition to the purchase of land to add extra incentive to people debating this issue. And speaking of the value of the land... what is it? Should you be paid what its worth now, or what it may become worth? Some people have felt like they've been undercompensated for their homes. Some savvy neighborhoods have not sold their plots individually, but have started companies (the power of collective bargaining!) and LEASED out their land to private companies. In one case, a neighborhood that started renting out a decade ago currently owns land that is now valued at ten times what it was when the corporation initially came knocking. Imagine if each of those home owners went individually to get a quote. This will not be an easy transition for India, and the eyes of the world will be watching, in this time of globalization, as the action of individual nations... whether positively or negatively... truly affect us all.
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