A Richer Future For India - McKinsey Study

Diana Farrell , the director of the McKinsey Global Institute, and Scratch Zainulbhai , director in theMcKinsey's Mumbai office write a report on " A richer future for India "

The wealth generated by India's fast-growing information technology and business-process-outsourcing industries shows that the country has started living up to its economic potential. Unfortunately, they produce just 3 percent of GDP and employ less than one-half of 1 percent of the nonfarm labor force. By contrast, most sectors of India's economy remain shielded from global competition by high tariffs and restrictions on foreign direct investment and are thus woefully uncompetitive. Although some might argue that removing these barriers would threaten social objectives such as the protection of jobs and incomes, a robust economy would be more likely to realize them.

The take-away
If India is to replicate the success of its IT and outsourcing industries elsewhere in its economy, its leaders must lower barriers to trade and encourage foreign investment in other sectors. .....More (Preminum Content : Requires registration - Free)