India charts quickened economy
New Delhi — An Indian newspaper once carried a cartoon depicting a large missile loaded atop a rickety bullock cart as a comment on the state of Indian technology. The economic reality in India today is not vastly different from the image portrayed in the cartoon. Though India is the world's 10th-largest industrial power, per capita income is among the world's lowest. In New Delhi, telephones are antediluvian; computers often sit idle because of power failures.
But India's new five-year plan (1986-90) indicates the nation is getting ready to move faster toward modernization.''
To step up the pace of economic development, ``India will have to jump on galloping horses rather than cover the distances limping by itself,'' government planner Abid Hussain says.
Even before Prime Minister Rajiv Gandhi assumed office late last year, India had been moving toward a more open economy, with the delicensing of certain industries, reduction of tariffs, and transfer of technology from outside sources. Both Western and Indian economists say that Mr. Gandhi wants to hasten liberalization.
Kamta Prasad of the Indian Institute of Public Administration in New Delhi describes Gandhi as ``pragmatic and flexible,'' compared with his more doctrinaire mother, Indira. Gandhi constantly stresses India's need for technology.
His policies face tremendous inertia from the Indian bureaucracy. Nonetheless, notes I. Z. Bhatty of the National Council of Applied Economic Research, ``10 years ago, these high-tech ideas would not have been acceptable.''
India's new plan wants the private sector to take a larger share of total investment and envisions a more export-oriented economy. It aims for 5 percent annual economic growth -- a little higher than the average in the past decade.
Both public and private industries will have to get more resources from stock and bond markets than from the government treasury.
Major government investments will go into energy, telecommunications, and transportation systems. The government is likely to toughen up on ailing or ``sunset'' industries in favor of industries such as energy exploration, motor vehicles, computers, and electronics. There is also a ``rethinking'' of government subsidies, a Western economist says.
Overall direction in agriculture may shift away from food grains, where India has been running surpluses, to cereals and pulses, where India has shortages.
A daunting bureaucracy persists, however, along with policies that continue to discourage many foreign investors. Still, India is not eager to open up completely for fear of being flooded with consumer goods and worsening unemployment.
``We're walking on the edge of a sharp knife,'' says Mr. Prasad. ``It has to be a very well-phased liberalization.''