The possibilities of next decade for Indians are tremendous, according to Mr K.V. Kamath, chairman of ICICI Bank.
Delivering the graduation day address at Justice K.S. Hegde Institute of Management at Nitte in Udupi district last weekend, he said: “In many ways we are at the same stage as China was in 2003, and therefore the possibilities for the next decade for us are tremendous.”
Vantage position
Structurally, India is in the same position, as the economies of China, Japan and South East Asia were in just prior to their growth phase. “We do have the potential of achieving the same results as they have,” he said.
Terming demography as the most important driver of growth in India, Mr Kamath said that by 2020 the demographic advantage in India relative to the rest of the world will become even more significant.
By 2020, the middle class population in the country would be close to 580 million and per capita income would be $ 4000. The ramifications of this are immense, resulting in demand for better living environment, and an accelerating consumption cycle.
Focus on infra
Economic growth leads to a demand for better services, infrastructure, and a spurt in consumption demand. Infrastructure development will be a key priority, and investment in infrastructure is projected to increase to over 9 per cent of GDP, he said.
Stating that economic progress will lead to a higher degree of urbanisation, Mr Kamath said a significant proportion of the growth is expected to come from the next level of cities.
The changing character and potential in rural India should further catalyse the progress. Several initiatives taken in the recent years such as rural road development, supply chain management, communication technology and financial services have redefined the business needs of rural economy, he said.
Challenges
Stressing the need for investments in basic healthcare, primary education and vocational training, he said the challenge today is in terms of upgrading skills and meeting industry requirements.
Both the private and public sector have to jointly provide wide-scale vocational training to quickly enhance the capabilities of people, he added.
Dr Shantaram Shetty, Vice-Chancellor of Nitte University, presided over the graduation ceremony.