India, which is seen as leading growth in South and South-West Asia, is likely to “become the second largest economy by 2050,” but in the near term India’s growth is likely to slow down even further to 5.9 per cent in 2012-13 from 6.5 per cent in 2011-12, said a report released by a United Nations (UN) agency on Thursday.
On a more optimistic note, the report by the UN Economic and Social Commission for Asia and the Pacific (ESCAP) noted, “There are indications that the sub-region (South and South-West Asia) is turning the corner and is likely to do better in 2013, with the Indian economy projected to grow at 6.8 per cent in 2013-14.”
However, notwithstanding the better economic position, the region still faces issues of inclusive and sustainable development, the ‘South and South-West Asia Development Report 2012-13’, said, calling for more co-operation between the countries to ensure a “sustainable future.”
“There has been significant pressure emerging from some countries for more direct integration of South Asian countries,” said Rajeev Kher, Additional Secretary, Commerce and Industry Ministry, adding that there was little by way of arrangements for this integration.
He said in view of the turbulent global economic conditions, there was an urgent need to maintain demand within the region to decrease dependence on external factors.
On India’s growth, Kher said, “We have seen that the manufacturing sector has not really grown, it has, in fact, shrunk…we are tilted towards services. Unless manufacturing grows, it will be difficult to sustain growth.”
He added that a number of Asian countries were facing this problem, and the region needed to develop manufacturing as the basis for evolving a paradigm of integration in South Asia.
Nagesh Kumar, Director, ESCAP-South and South-West Asia, said creation of industries was also important for poverty alleviation. He said, in India 56 per cent of the population was responsible for 18 per cent of gross domestic product, and if these people are not given other opportunities, their condition was unlikely to get better.
He said regional co-operation could change this culture and lead to creation of industries, and thus, jobs.