Many years ago when I studied in Liverpool and played a little cricket with two brothers (Misra and Yogi) from Mumbai (what was then Bombay), India was regarded as a 'basket case' economically. Because of its shortage of hard currency, my friends and other Indian students would return from trips home loaded with clothing, jewelry and other items which they sold to help pay their bills.

Today, India, like the other new Asian economic dynamo, China, not only has huge foreign reserves running at more than US$280 billion (the fifth largest), but is recovering robustly from the global recession. And from all accounts, it could soon see faster growth in investment and output than before the crisis.

Even as the International Monetary Fund (IMF) and World Bank are forecasting that world output of goods and services will contract this year, India's US$1.2 trillion economy, the third largest in Asia, is projected to record growth of more than 6.5 per cent and to accelerate to eight to nine per cent by 2011. Thus, it is expected to consolidate its twelfth place in the World Bank's 2008 ranking of major economies, and to soon overtake Canada and Spain, which stood above it in the eleventh and tenth positions, respectively.

Over the next decade, India is also likely to overtake Brazil, which last year ranked eighth with gross domestic product (GDP) of US$1.6 trillion, and is currently the second-largest developing economy.

But were we to use the bank's GDP figures based on purchasing-power parity (a methodology that adjusts for exchange rate effects), India's economy would move up to fourth spot behind the United States, China and Japan and ahead of Germany, France, the United Kingdom and Brazil. According to this approach, India's GDP would stand at US$3.4 trillion, or just less than one-third the size of America's figure of US$14.2 trillion, and less than a half of the Chinese economy, which would be valued at US$7.9 trillion.

Economic strides

Whatever the measure though, India has made spectacular economic strides in the last two decades, in spite of the assassination of two prime ministers (Indira and Rajiv Gandhi), and the frequent and destabilising shifts in the balance of power between its main political parties.

We also cannot ignore the ongoing conflicts among its religious factions, near civil wars, and the economic costs of its border dispute with Pakistan over Kashmir. And there is, too, its vulnerability to frequent natural disasters. But these obstacles have been overpowered by the massive returns now being reaped from its sustained investment in education, which has provided it with the second-largest pool of skilled manpower and a middle class of 300 million, bigger than that of the US.

It is upon this solid educational foundation of a highly trained, competitive labour pool that India has emerged as a centre of research and production for a range of high-technology industries, but also as a source of doctors, engineers, accountants and other professional and technical expertise. As was the case with China, its progress in the agriculture sector through the Green Revolution that began in 1965 under Indira Gandhi was decisive in moving India to self-sufficiency in food grains for a population of 1.139 billion, banishing famine, which many Indians had thought was inevitable and would, "as the poor", be always with them.

It is the second-largest producer of rice and wheat with the states of Punjab, Haryana and Uttar Pradesh figuring hea-vily in the vast expansion of production; and it also ranks second among sugar-producing countries. The Green Revolution involved the introduction of high-yielding varieties of seeds, increased use of fertilisers, installation of irrigation on a wide scale, and a more than thirty-fold jump in the area under production from 1.9 million hectares in 1960, to 63.9 million in 1990. Nonetheless, regional and inter-state income disparities were exacerbated as some states achieved limited results due to lack of adequate water supply or other inputs, while others saw enormous increases in production that fuelled strong income growth and steep declines in poverty levels.

Industrial champions

More recently, India has been more noticed for the leap it has made in the information communication technology (ICT) industry typified by Bangalore's emergence as a hub in the global industry. Its booming stock market, high savings and investment rates, and global industrial champions, are indicative of a fast-rising economic force. Its champions include the Reliance Group, a diversified industrial enterprise covering energy and petrochemical products and which is the world's largest producer of textiles. Reliance is India's largest private-sector business and a Fortune 500 company.

Arcelor Mittal, the world's leading steel company, which operates in more than 60 countries, was also an originally Indian-established business. Jamaicans are more familiar with the Tata Group, which supplied buses to the island in the 1980s and last year acquired Jaguar and Land Rover, emblematic British brands. Its businesses span engineering, chemicals, consumer products, and now film production, with its entry into Bollywood nearly a decade ago. India's growing industrial capacity and price competitiveness have enhanced its position as a source of manufactured goods, which made up almost 64 per cent of merchandise exports in 2007.

Having avoided the worst effects of last year's global financial meltdown, India is managing to regain economic momentum, and with stimulus spending, is boosting internal demand. An expanding middle-class population will enable it to ease the reliance on exports as the main driver of economic growth in the coming period, but its competitive manufacturing industries could become major suppliers for Jamaica and other developing countries.

Dennis Morrison is an economist. Feedback may be sent to columns@gleanerjm.com.