World Grain - July 2015 - 8

FROM THE EDITOR-IN-CHIEF

India may soon rival
China in growth

N

o matter how remote a company
considers itself as being relatively
uninvolved internationally, it is the
rare enterprise that has avoided all effects
from what has occurred in China in recent
years. From its impact as a buyer of grains
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amazing economic growth, China won the
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panies of all shapes and sizes. Even as Chi
na's economic growth has begun slowing
from an astonishingly high double digits, it
has a neighbor in India that is seen as having
similar potential to exert much the same in
ÀXHQFHVRQWKHJOREDOJUDLQHFRQRP\7KHVH
two Southeast Asia behemoths may affect
the state of global business in ways that
could reach every part of the U.S. grain and
JUDLQEDVHGIRRGLQGXVWU\
Predictions have been made so often about
India's potential for rapid growth, only to be
IROORZHGE\IDLOXUHVRRQDIWHUWKDWSUHVHQW
day commentators are cautious in predicting
that India is on the verge of rapid improve
ment. Comparisons with China mainly re
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of 1.4 billion slightly exceeds India's 1.3 bil
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will soon be larger than China's.
But it's not massive population alone that
is cited for growth potential. India's popu
lation is much younger than China's where
the aging share has increased to a point of
concern. India is a liberal democracy with
a political system considered positive for
growth. Excellence in education has created
a large pool of young people highly trained
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by vast numbers of poor, undernourished
people working in agriculture and in cities
on paltry incomes. Hardly 10% have jobs
of western standards. Food distribution and
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production lessened by dismal distribution
due to terrible infrastructure. India is the na
tion where the Green Revolution began de
cades ago, only to fall short in ending hun
ger for other reasons.
It has been noted that if India has a chance

8

of emerging as the fastest growing nation in
the world. If that happens, it will be due to
the low level from which that occurs. From
1980 through last year, China's domestic
product per capita grew 17 times. In the
same period, the International Monetary
Fund says India's per capita GDP rose four
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ment enjoyed by millions in India. Such es
timates also underscore the chasm India now
views as its target for changing.
While better infrastructure is absolutely
necessary for India even to consider taking on
such a task, promoting private sector invest
PHQWLVJLYHQHTXDOO\JUHDWXUJHQF\)LQDQF
ing public investment is an immediate goal,
and this needs to be conducted in a manner
that does not interfere with private banking.
Much attention has been given to adopting a
sales tax as a forerunner to establishing a na
tionwide market that is sorely absent at pres
ent. Lack of national markets surely weighs
on the few food brands and food manufactur
ing operations that have tried to extend be
\RQGDKHDGTXDUWHUVFLW\RUVWDWH$ORQJWKLV
very line, it is no surprise that the prime min
ister elected last year, Narendra Modi, has
pledged that he will seek to improve the en
vironment for business, including easing the
burden of the bureaucracy. His progress is so
IDU TXLWH OLPLWHG ZLWK FRQVWDQW FRPSODLQWV
about state efforts to impose special taxes on
businesses as well as worrying about labor
relations and inspectors.
India is ranked by the World Bank as 142nd
out of 189 countries rated for ease in doing
business. It is one place above the West
Bank and Gaza. Mr. Modi's government has
a tough balancing act to help business while
not seen as neglecting the poor and farmers.
It is easy to assume that only limited im
provements are likely to make India a better
place for business. Yet, small gains by that
KXJH QDWLRQ DUH OLNHO\ WR KDYH TXLWH D VLJ
QL¿FDQWLPSDFWRQJOREDODVZHOODVGRPHVWLF
grain businesses.
Morton I. Sosland
(GLWRULQFKLHI

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WORLD GRAIN (ISSN 0745-8991) Volume 33, issue 7,

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