India, traditionally seen as the jewel of the East, recently surpassed the UK to become the world’s 5th largest economy. Such an achievement fuels optimism about India’s potential as an economic powerhouse. However, a deeper dive reveals complex challenges juxtaposed against unprecedented opportunities.
The China Comparison
When assessing India’s economic progress, the inevitable comparison arises with its Asian neighbor, China. Historically, in 1980, India’s GDP was a promising 64% of China’s. Fast forward four decades, and this figure shrinks to a mere 17% by 2021. The vast gulf between the two nations is further illustrated when you consider that if India had kept pace with China, it would be boasting a GDP of $10 trillion, rather than the current $3.47 trillion.
The Demographic Dividend
One of India’s most significant advantages is its demographic profile. More than half of its populace is under 25, with two-thirds below 35. This youth bulge can be both a strength and a liability. While this promises a robust workforce for the future, the current youth unemployment rate stands alarmingly at 40%. When juxtaposed against the overall unemployment rate of 7.7%, it paints a stark picture of unfulfilled potential.
