India as a World Power

India has the capacity to become a world power by means of economic transformation and defining itself as a bridging power.The current global supremacy of the United States was greatly helped by its longest and strongest economic boom of 1992-2000. The world and India are bullish about the Indian economic performance in the next 20 or even 50 years. A recent Goldman Sachs report has projected Brazil, Russia, India and China (BRICS), as the new global economic super power. If they keep their recent rapid growth rates, it predicts very significant shifts in world power balances and India is projected to grow fastest.There are remarkable features of India's economic performance over the last two decades. It has experienced a very high growth rate of output per capita (3.8 percent) surpassed only by China and east Asian countries. Its growth has been most stable surpassing even China and east Asian countries. About 60 percent of its growth has come from the rise in total factor productivity, a performance that was only surpassed by China, and hence sustainable in future. India is riding on a wave of growth fundamentals such as demographic transition, huge reservoir of young and world class human resources, improved incentive structure and security environment and diffusion of new technologies such as information technology. Basis for strong growth is country's good economic and political institutions - a stable democratic polity, reasonable rule of law and protection of property rights. They need to be reformed, nurtured and fine tuned but they collectively represent an opportunity to leapfrog into a new phase of growth. India's forex reserves are at record levels and rising, inflation is low, the share of services in GDP has increased to 50.8 percent and industry is picking up. Fiscal fundamentals are, however, grim and worsening - a large fiscal deficit in the order of about 11 percent and public debt amounting to about 75 percent of GDP. This is particularly important due to link between fiscal consolidation, investment and growth. Inadequate infrastructure, slow growth of employment, poor performance in human development and regional disparities are other major areas of concern.