India still poorest among G20: Economic Survey

NEW DELHI: India is still the poorest among the G-20 nations despite it being a more open economy over the years and having moved up the ranks, according to Economic Survey 2011-12. “While the country has an advantageous demographic dividend, its low spend on Research and Development and innovation, low energy intensity of GDP, 80 per cent dependence on imports for petroleum products, dependence on global markets for food security and a need for sustained investment are some of the areas which will have to be addressed for the country to emerge as a strong global player,” said the Survey tabled in Lok Sabha by Finance Minister Pranab Mukherjee on Thursday. However, it said India’s share in global merchandise exports increased from about 0.5 per cent in 1990 to 1.5 per cent in 2010. “Moreover, the extent of fi nancial integration, measured by fl ows of capital as a share of GDP has also increased and the role of India in the World Economy has commensurately expanded along with the other major members of emerging markets, which as a whole now account for one-half of world output,” the Survey said. It said, as per the IMF, at a growth rate of 7 per cent, India is projected to be the second fastest growing major economy after China. The Survey said after opening of the economy in early 1990s, India has begun to appear as a player of signifi cance in the global economy. “The country’s exports have begun to climb, its foreign exchange reserves, which for decades had hovered around 5 billion dollars, have gone up exponentially after the economic reforms and in little more than a decade has risen to 300 billion dollars. Indian corporations that rarely ventured out of India are investing all over the world and some even in the industrialised countries,” it added. The Survey said given its size and profi le in the global economy, India will inevitably need to play an active role at global level, not just in the efforts towards resolving the current crisis but also in infl uencing the goals for the global economy on overarching macroeconomic issues such as trade, capital fl ows, fi nancial regulation, climate change and governance of global fi nancial institutions. Refl ecting upon the state of global economy, the Survey said there is an apprehension that the process of global economic recovery that began after the fi nancial crisis of 2008 is beginning to stall and the sovereign debt crisis in the Euro zone area may persist for a while. It said looming risk to the global outlook is also on account of geo-political tensions centered on Iran that could disrupt oil supply and result in a sharp increase in oil prices and even disrupt supply routes. It said volatility in capital fl ows resulting from the spillover affects of monetary policy choices and other uncertainties in advanced fi nancial markets further impacted exchange rates and made the task of macro- economic management diffi cult in many emerging economies.