Libmonster ID: IN-1337
Author(s) of the publication: A. V. AKIMOV

Indian civilization has an ancient history, but the Republic of India is a new state entity. We can say that it is a man-made project, because never before has such a country existed, within such borders, with such a form of government and administration. The Constitution adopted on January 26, 1950, legally formalized this project state.

In economics, SWOT analysis is widely used to analyze long-term projects. This study focuses on the following areas: strength (strengths), weakness (weaknesses), opportunities (opportunities), threats (threats, or risks). It seems that this kind of analysis can be useful for organizing the success and achievements of India, the challenges it faces and new opportunities.

STRENGTHS: FLEXIBLE STABILITY...

Independent India at the beginning of its existence was a rather risky political project, since the new state consisted of separate parts that had a history of independent existence, and in the first years of India's independent path, the stability of the federal form of government of the country caused many doubts.

In a country that is large in population, vast in territory, ethnically, confessionally, and economically heterogeneous, the federal structure may be the basis for a split if its initiators appear. The examples of the USSR and Yugoslavia clearly show this. The Indian political system was able to respond flexibly to the needs of different parts of the country and maintain its unity.

Another success was that the political system that was created 60 years ago and the democratic structure of the state took place. India is the largest democracy in the world. The elite coped with the task of building a political system with a large margin of safety. For comparison, China probably still faces a difficult period of changing political power in the direction of greater democratization, which opens up more opportunities for the development of civil society, without the formation of which the development of the post-industrial economy is hardly possible, and India has already successfully passed this milestone.

Russian researcher A. G. Volodin identifies two functions of the party-political system of India that ensure the effective functioning of civil society in this country: integration of various levels of civil society, including ethnic, religious, and social groups, and continuous replenishment of the political elite during the electoral struggle.1 We can say that the first function provides stability, and the second-variability and response to a changing situation.

India's foreign policy has two distinct aspects: relations with neighboring countries, which for many years were confrontational, sometimes even escalating into wars, and relations with the world community, where India advocated peaceful coexistence and non-alignment. However, largely under the pressure of the military threat from neighboring countries, India had to spend considerable effort on military building2. A modern army, air force and navy were created, and later-nuclear weapons and modern means of their delivery.

At the same time, the armed forces act more as a guarantor of stability, and successive Indian governments have not sought to use them as an active tool of foreign policy. Even a powerful country like the United States has more negatives-

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India gained independence in 1947 as the British dominion of the Indian Union. Its constitution, which came into force on January 26, 1950, defined its state structure and the laws that govern the country. This date is considered the beginning of Indian statehood and is celebrated as Republic Day.

India today. Reference and analytical publication (head of the author's team Shaumyan T. L.). Moscow, IV RAS, 2005, p. 125.

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There has been more negative than positive experience in using this foreign policy tool. But India has managed not to get involved in military adventures.

At the same time, although nuclear forces and missiles were created as a counterweight to neighboring Pakistan and China, these weapons are becoming a useful asset for India in its positioning as a global power center.

India's quest for global leadership has evolved somewhat. Initially, she was a spokesperson for the interests of developing countries and a leader of the Non-Aligned Movement. As the Indian economy grew, its ties with developed countries grew stronger, and the very concept of "developing countries" lost its integrity and uniformity, India adopted a policy of strengthening direct ties with the West.3

The political elite, which flexibly combined adherence to the basic principles laid down in the country's constitution and customs, national culture and mentality, with adaptation to changes in political and economic conditions, managed, unlike Pakistan, to preserve the country's integrity and avoid tragic extremes in politics (such as the "great leap forward "and the" cultural revolution " in the PRC and to make the transition from central planning, which had many similarities with the Soviet system, to a market-based macroeconomic environment without a downturn and loss of economic manageability (Russia failed to do this).

...AND THE ECONOMY: STAGES OF THE LONG ROAD

In recent years, the strongest side of the Indian development model is a strong economy with growth potential and a steadily developing domestic market. For a long time, the Indian model did not follow the path of export orientation, which was the key to the success of several generations of catching-up countries, starting with Japan, 4 but in the context of the current global financial and economic crisis, it is experiencing not the best of times. India, in the course of economic reforms since the early 1990s, began to form the same model, but did not have time to significantly reorient itself to it, and this circumstance is becoming an advantage in the process of overcoming the crisis. India has suffered little from the global crisis. If the PRC had to resort to a large-scale shift of resources to the development of the domestic market, which turned out to be within the power of a centralized apparatus that retained the tools of socialist state management of the economy, then India did not need to radically change its economic policy, which was largely focused on domestic demand.

This policy has undergone a great evolution over the years of independence. Initially, it was aimed at import substitution, since independent India at the beginning of its journey, in fact, had only light and food industries, and almost all goods outside of these industries had to be imported.

Catch-up development was gradual.

The first five-year plan was devoted to the problems of agriculture and overcoming hunger, and later heavy industry began to form. Agrarian reform has become an important process in the country's economic and social life. Archaic land relations in India held back the development of agricultural production and created deep social inequalities that blocked progress in the agricultural sector. The reform of land relations, which has not yet been fully completed, has made it possible to remove the main obstacles to the development of agriculture.

A significant success of the country was the economic reform, which began in the 1990s. There has been a gradual reduction in government intervention in the economy and the opening of the country to foreign investment. As a result of the reforms, domestic businesses and previously state-sponsored industries not only did not suffer from increased competition, but also managed to successfully take advantage of new opportunities, which, in particular, led to an increase in the pace of economic development.5

Over the years of independence, India's gross domestic product (GDP) has grown in rupees by almost 7 times in volume and approximately 3 times per capita.6

A significant achievement of India is the creation of a multi-profile mechanical engineering industry that can support both the consumer and investment sectors. By the time of independence, Indian industry was a typical example of the colonial type of capacity and production structure, with a huge dependence on imports for almost all types of products, with the exception of light and food industries.

Currently, the machine-building complex of India is developed to the level of world standards in a number of industries, such as individual branches of power engineering, electronics, and arms production. It has a massive production base in the transport engineering, automotive, machine tool, and home appliance industries, which provides the necessary volumes of machine-building products for the vast domestic market, including consumer and investment goods.

Another indicator of the development of a large economy is the state of the chemical industry. This is a complex lump-

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the range of industries, and the degree of its development characterizes the state of the country's technological culture. India has made significant progress in the development of the national chemical industry. The development of the production of mineral fertilizers and pesticides has become a growth factor in agriculture, petrochemicals have given an impetus to the development of the production of a wide range of modern synthetic materials and plastics. The Indian pharmaceutical industry has reached the international level.

Such complex industrial and economic complexes do not arise by themselves. The only exceptions are the most advanced countries such as England and the United States in the 19th century and Germany in the late 19th and early 20th centuries. In other countries, which are forced to follow the path of catch-up development in one way or another, considerable joint efforts of businessmen, engineers, government officials and politicians are required to develop complex national industries. One may disagree with Karl Marx in many ways, but it is difficult to deny that the development of the productive forces, and especially of the means of production, is an important indicator of progress. The machine-building and chemical complexes and their degree of development are an important indicator of the country's economic condition.

The modern complex of Indian industries is largely a product of centralized state planning, 7 but, in parallel with the development of heavy industry and modern industries, this policy ensures the growth of production in light industry. This industry is traditional for India, and its role in employment and in the life of the broad masses of Indians is quite large, if only because the vast domestic market places demand on products of Indian manufacturers who know the specifics of the market and are able to meet the needs of both modern and traditional consumer segments.

A significant role in this industry, as in a number of others, especially in the service sector, is played by small businesses. Its social role in the life of India is very great, as only it is able to absorb the significant increase in the labor force caused by the still high population growth rate. Small business in India plays an important stabilizing role in both the social and economic spheres. E. A. Bragina rightly emphasizes: "Small business forms to a certain extent resist the chaotic economy, disruptions in production relations that are inevitable when the development model changes, its significant changes, and structural shifts" 8.

Along with the development of industry, India has managed to solve the most acute problems of food supply. The "Green Revolution" in the 1960s significantly increased the yield of the main food crops in the country. State support for agriculture has made it possible to raise productivity to a level that has ensured the overall food security of the country. India ranks 2nd in the world in the production of important crops such as rice and wheat, and 1st in the production of legumes.

Training of personnel for developing complex industrial complexes has become an important component of the success of the Indian economy. Literacy has significantly increased in the country (over the years of independence, the share of literates has increased more than 3 times), and most children are enrolled in primary education. The greatest success has been achieved in the field of higher education. If in the early 1950s there were only 27 universities in the country9, since then they have become almost 8 times more.

The strength of the Indian economic system is that the achievements of scientific and technological progress serve the goal of improving the lives of the poor part of Indians. 10 These include cheap generic drugs, i.e. those whose patent has expired in Western countries, biogas, cheap solar panels, and rural electrification. These are cheap vehicles, which are represented by mopeds, and cars of Western and East Asian manufacturers, in which the models produced in India are controlled to the limit.-

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pup, at least in terms of interior trim and dashboard, which reduces the cost and makes them acceptable for the broad Indian market. As for mobile communications, India has provided itself at a very high level. According to the number of cell phones, it is on the 3rd place in the world. The country produces not only mathematical software for export, but also its own computers.

The widespread use of the English language (an educational institution called the Institute of Foreign Languages in Russia and the school of English and foreign languages in India) has served as a valuable tool for India to integrate into the global economy.* Since most students know English, they can be taught using the best Western textbooks. There are no problems in communicating with foreign investors.

Brain drain was a problem for India for a while, but now the Indian diaspora has become a conduit for Indian interests abroad. Although it is small in comparison with the population of India itself, it is quite influential in North America, the United Kingdom and a number of European countries. The Indian government is attentive to these people even in small details. For example, during passport control, they are singled out among foreigners in a separate group of "Indian compatriots".

These efforts are not wasted. In December 2009, the first congress of the World Organization of Indian Scientists and Technocrats was scheduled to be held in Pune, Maharashtra.11 This organization was created by the international Indian Diaspora to establish ties with the homeland and contribute to its development.

Having significantly westernized material life, the Indians did not lose the traditions of their civilization, but at the same time brought their national (or civilizational) component to modern culture. An example of this is Indian cinema, which not only successfully competes with Hollywood in its homeland, but also achieves recognition even in the United States, as evidenced by the award of the Academy Award for the Indian film "Slumdog Millionaire" in 2009.

WEAKNESSES: SUNSPOTS

India's weaknesses are poverty, rural socio-economic backwardness, high population growth, limited natural resources, and environmental degradation.

Rural and urban poverty persists and even increases even at high rates of economic growth. Its acute manifestation is chronic malnutrition. According to UN estimates, in 2003-2005, India had 231 million people with lower-than-normal caloric intake, which is 11.6% higher than in 1990-1992. 12 The main problem is that agriculture is mostly subsistence and only barely allows them to feed themselves a significant part of the rural population, while remaining a stagnant part of the national economy 13. The environment in rural areas under the existing load is declining, which limits the opportunities for agricultural development.

India is a large country with significant mineral deposits, but it is forced to import many resources, including oil (India ranks 5th in the world in terms of oil consumption), and this is a resource that has become the subject of global competition.

The population growth rate has slowed, but it is still higher than it should be for a quick solution to the problem of poverty. India has an annual population growth rate of 1.6%, while China has an annual population growth rate of 0.5%. As the Russian indologist A.M. Goryacheva points out, "in economic terms, the main obstacle to implementing a policy to limit the birth rate is poverty."14 A vicious circle is formed: poverty supports a high birth rate, and high population growth rates make it difficult to combat poverty. Moreover, the success of demographic policy in the modern, rich, educated part of society means a decrease in the birth rate in this environment, while the traditional, poor, uneducated part of society maintains high population growth rates. As a result, the share of this backward part of society in the total population is increasing.

Although India is not a world champion on formal measures of income inequality, such as the Gini coefficient, examples of contrasts where the super-modern and rich are juxtaposed with the backward and poor are often quite striking in India. In the restaurant of a modern hotel in Hyderabad, a city where a number of modern industries, including electronics, are developing rapidly and successfully, the water tap in the washbasin works using infrared sensors: put your hands to the tap - the water flows, remove your hands, the water stops flowing. This is done to save water. And a 20-minute drive from the hotel on the street, you can see how water flows from the hose directly to the ground in a thin trickle (also to save money). Children swim in the resulting puddle. And the woman draws handfuls of water from it and pours it over her head - a poor man's bathroom.


* In India, English, along with Hindi, has the status of the state language (editor's note).

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FEATURES: 10 GOLDMAN ABSTRACTS

The creators of the abbreviation BRIC (Brazil, Russia, India, China), which denotes countries with great potential for development in the XXI century, from the international consulting firm Goldman Sachs, believe that if successful, by 2050, the Indian economy may exceed the US economy in scale.

But to do this, in their opinion, India needs to solve 10 main tasks, which will significantly accelerate the pace of socio-economic development and achieve a high status in the world community by 2050. These tasks are formulated as follows:

1. Improving public administration. Without this, it is difficult to count on improving the education system, creating infrastructure, increasing agricultural productivity and sustainable economic development.

2. Development of the general education system. The challenge is to make primary and secondary education universal, as not all children are currently enrolled in school. Universal education can be a powerful lever for unlocking the nation's potential.

3. Increase the number and quality of universities ' work. On the opposite side of the spectrum of the education system, India also needs improvements to unlock the potential of its growing population.

4. Control of inflation. Despite the fact that India is not among the countries with very high inflation, price growth has accelerated markedly in recent years. Achieving the maximum allowable inflation rate should ensure price stability for the country's gigantic population.

5. Conduct a credible monetary policy. Without a predictable monetary policy that is understandable to society and the business community, it is also difficult to fight inflation. Medium-term plans that include estimates of government spending can be a useful tool.

6. Financial market liberalization. Further liberalization of India's financial market can contribute to sustained economic growth.

7. Increase trade with neighboring countries. Currently, India is less open in terms of foreign trade than other major developing countries and transition economies, especially when compared to China. Recommended partners for expanding trade are large neighboring countries: China, Pakistan, Bangladesh.

8. Increase agricultural productivity. Agriculture in the face of rising global prices for the products of this industry can become an additional opportunity for India to grow. There is a need to develop agricultural productivity improvement plans that can address global food needs.

9. Infrastructure improvements. The quality of infrastructure in India is low. Without infrastructure development, economic development will have limited opportunities.

10. Improving the quality of the environment. In the field of improving the quality of the environment, it is necessary to fight for increasing energy efficiency-

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ti and improving the environmental friendliness of energy. The second task in this area is to improve water supply and environmental protection of fresh water. These are the necessary conditions for sustainable growth 15.

It seems that the solution of these tasks is quite likely, so that India will be able to realize its potential of catching up development.

The growth of India's role in the world in the coming decades is no longer in doubt. The report of the National Intelligence Council of the United States - the "umbrella" analytical body of the US intelligence services - notes:: "Over the next 15 to 20 years, Indian leaders will struggle for a multipolar international system in which New Delhi becomes one of the poles, as well as a political and cultural bridge between a rapidly growing China and the United States. India's increasingly assertive behavior in the international arena, fueled mainly by economic growth and successful democratic development, is pushing the country to partner with many States. However, this partnership is aimed at strengthening India's independence, and not at an alliance with any country or coalitions of countries. " 16

According to Russian researchers B. N. Kuzyk and T. L. Shaumyan, energy prices, the information revolution and technological innovations, including those related to the prevention and treatment of diseases, will have a significant impact on India's foreign policy in the coming decades. "Other factors include continued migration from the country, as well as increased migration flows to developed countries"17. These factors are unlikely to become constraints on India's economic progress, so that the country has no insurmountable internal or external obstacles to development.

The prospect of India's integration into globalization without losing a significant role of the domestic market is also real for India. India, one might say, missed the time when it was possible to develop an export-oriented model and quickly build up the country's economic potential. Many niches in global demand were occupied by competitors, mainly from Southeast and East Asia, and partly Latin America. Now, in the context of the global crisis, less dependence of the economy on export markets seems more promising.

India has developed a research and development complex focused on the development of a wide range of industries, agriculture, transport and communications. This complex can become a base for sustainable development of the country for many decades. Catch-up development aimed at reducing poverty and improving the standard of living of all segments of the population guarantees India a wide range of real needs that are available in society. The question is how to turn these needs into effective demand, and who will pay for meeting these needs. In this context, the polarization of Indian society can be a productive moment in economic policies aimed at import substitution.

If the export-driven part of the Indian economy, including modern outsourcing in the service sector, generates an influx of foreign currency to be spent in India, this can be a boost for the entire economy of the country. This requires government measures that create favorable opportunities for foreign investors in manufacturing in India.

It can only be said with regret that Russia is currently losing out in competition with other countries seeking to become influential partners of the growing India.

THREATS: WILL WE BE ABLE TO GET AHEAD OF THEM?

Perhaps the most painful question for the future of India is how sustainable development is possible with such a strong separation of the most modernized and globalized modern part of Indian society from its traditional, poor, uneducated and semi-natural economy.

It is possible to compare India and the USSR, although with great reservations. The Soviet Union was also characterized by a large gap between the part of it that was involved in competition with the West, albeit mainly in the military and military-technical spheres, and the dominant mass of the population, which was far behind in both productivity and living standards.

Threats to India's future include a split society into a modernized and traditional part, a lack of resources for development due to a downturn in the global economy or a fierce struggle for resources between India and China, an environmental catastrophe that can cause population growth.

According to the UN forecast, India's population will increase by 200 million people to 1,391 million by 2025. By the same time, the population of Bangladesh will grow to 190 million, and that of Pakistan to 230 million.18 This growth means a dangerous increase in the burden on existing natural resources that support the traditional part of society in South Asia. In a catastrophic scenario, both severe internal problems in India are possible, due to the need to find resources to support tens of millions of people who have lost their livelihoods, as well as acute international conflicts with neighbors or humanitarian disasters in Bangladesh and Pakistan.

If India fails to accelerate its socio-economic development, then by 2050 it will face not GDP growth to the level of the United States, but an environmental catastrophe. In the case of an inertial version of demographic development, by 2050, the population density of India will increase to-

page 7

It puts more than 700 people per square kilometer, while in Bangladesh-almost 2500 people and in Pakistan-about 500 people. Such a load on the territory is impossible in an inertial scenario of economic development. The whole of South Asia needs to accelerate development to save itself from an environmental catastrophe. If the region, especially Bangladesh, does not grow rapidly, there is a high probability of a demographic catastrophe that could cause a crisis in neighboring countries as well.

There are also risks in the advanced sector of the economy. Outsourcing, that is, the transfer of service centers by means of modern communications to other countries, programming for customers in developed countries, strongly depends on the state of the economies of the customer countries, primarily the United States. An economic downturn could hit this part of India's modern economy. In addition, so far the service sector that India can provide has been growing all over the world, but there are limits to this growth.

Summing up, we can say that the model of society built in India is resistant to external influences, has a great potential for self-development, but the biggest threats are hidden in the problems of India itself.

This is the remaining significant population growth with limited natural resources of the country. The question is: will India have time to become a developed country that solves all technological problems in the event of an acute shortage of natural resources, before population growth leads to an environmental catastrophe that turns into a social one and negates all previous achievements?

But the country is no stranger to overcoming difficulties. For 60 years, old and new problems have been solved in one way or another thanks to a flexible political and economic system. Even despite the current global crisis, the country's GDP growth rate, according to various estimates, will reach a very high level in 2009 - 6-7%.

India has the right to be proud of its achievements as it celebrates the anniversary of its Constitution and the proclamation of the Indian Republic.

And she has every reason to expect that she will successfully cope with difficult challenges.


Volodin A. G. 1 Politicheskaya ekonomiya demokratiki [Political Economy of Democracy]. Moscow, Gumanitarii, 2008, p. 233.

2 See: Yurlov F. N. India: military doctrine and armed forces / / Vostok (Oriens), 2009, N 3-4.

3 S. I. Lunev notes such a turning point in India's foreign policy: "If in the 70s and 80s the largest states of the South tried to consolidate their position in the world economy by joint actions with other countries, then in the changed conditions they prefer to act in an individual capacity. Thus, India's desire to strengthen its authority among developing countries has significantly weakened. Initially, New Delhi made efforts at least to preserve the position of the Non-Aligned Movement, which was one of the cornerstones of the country's foreign policy. But gradually, New Delhi realized that strengthening its position in the South is not enough to enter the "world's top league", and sharply aggravated differentiation among developing countries prevents the organization of any single political or economic entity. In fact, India has now lost its former status as a representative of the interests of the liberated countries." Lunev S. I. Otnosheniya tsentr-peripheriya: Aziya v sovremennoi mirovoi sisteme [Center-periphery Relations: Asia in the Modern World System]. Collection of articles in memory of V. A. Yashkin. 2004, p. 91.

4 G. K. Shirokov pointed out the great difficulties of developing an export-oriented economy in India: "In India, for example, it is necessary to increase exports by 10.2% in order to get an increase in production by 1%. Any significant impact of export industries on national production will require such an expansion of the external market, which is unlikely in the foreseeable future. Therefore, in large countries, the domestic market remains crucial for the growth of industrial production." Shirokov G. K. Promyshlennaya revolyutsiya v stranakh Vostoka [Industrial Revolution in the countries of the East]. Moscow, Nauka Publ., 1981, pp. 130-131.

5 See: Malyarov O. V. Ekonomicheskaya reforma v Indii [Economic Reform in India], Moscow, IV RAS, 2007.

6 Overview of the Indian Economy - http://indianembassy.ru 09.10.2009.

7 See: Yashkin V. A. Planning in India: Macroeconomic models and Development Strategies // Developing Countries: Accumulation and Economic Growth, Moscow, 1973, pp. 175-210.

8. Bragina E. A. 8 Small enterprises in the economy of developing countries in Asia and Africa. 2006, p. 63.

9 India today. Reference and analytical publication. Head of the author's team Shaumyan T. L. M., IV RAS, 2005, p. 396.

10 " Article after article describes talented Indian youth who have mastered advanced technology as a greedy, socially irresponsible middle class like American yuppies. Much less attention is paid to the fact that, thanks to computers, 6,700,000 farmers in Karnataka can get, for the equivalent of 30 cents, a copy of a land registry certificate that protects their property from being seized by corrupt landowners." - See: Toffler E., Toffler H. Revolutionary Wealth, Moscow, AST, 2008, p. 424.

11th Congress of the World Organization of Scientists and Technocrats-2009 -http://indianembassy.ru 09.10.2009.

12 Assessment of the World Food Security and Nutrition Situation. Committee on World Food Security, 34th Session. Rome, 14 - 17 October 2008, p. 2.

13 "Thus, the grain economy of India is undergoing a special stage of economic evolution, which is characterized by a deepening "dualism": one (gigantic in terms of the number of people covered) division of this economy is increasingly losing the macroeconomic functions that it performed earlier (supply of basic agricultural products to the market), and thus (in a trend) it gradually falls out of the national system of social division of labor as a producer of marketable food; another (much smaller) division, on the contrary, increasingly takes on the solution of the most acute problems of social production, providing a growing mass of marketable production products." - See: Rastyannikov V. G., Deryugina I. V. Models of agricultural growth in the XX century. India, Japan, USA, Russia, Uzbekistan, Kazakhstan. Moscow, IV RAS, 2004, pp. 197-198.

Goryacheva A.M. 14 Demographic policy in India // Eastern countries. Management of Demographic processes, Moscow, Nauka Publ., 1992, p. 22.

O'Neill J. and Poddar T. 15 Ten Things for India to Achieve its 2050 Potential // Goldman Sachs Economic Research. Global Economic Paper No 169, June 16,2008.

16 The world after the crisis. Global Trends-2025: a changing world. Report of the National Intelligence Council of the USA, Moscow, Europe, 2009, p. 74.

Kuzyk B. N., Shaumyan T. L. 17 India and Russia: Partnership Strategy in the XXI century, Moscow, 2009, p. 1079.

18 2007 World Population Data Sheet. Population Reference Bureau. Washington, DC, 2007.

Akimov V. 19 Global development, population growth and security of the main natural resources/ Geography of global development. Issue 1. Moscow, IG RAS, 2009, p. 181.


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