An IDC Analysis


New Delhi, 22 February 2005

AERO INDIA 2005 was a world class air show and we noticed the awe and surprise on the faces of foreign delegations and media reps, who witnessed the progress India had made in aviation and military prowess and was adapting to foreign technology –– especially the Navy and the IAF. In fact the German firm collaborating with DRDO had provided the structural trestle work from Germany that were launched just a few months ago in that country, for the LCA mock up and BrahMos stalls.

There was a delegation from China led by Air Vice Marshal Zhu Xinwen and the media asked questions from the Secretary Defence Production whether India could export defence equipment to China and the answer was it will be looked into case by case. The three Indian LCAs flew in formation, the ALH performed antics in the air and two Indian built Intermediate Jet Trainers flew in formation to thrill the crowds. Unfortunately the F15 and PC3 Orion and C130J pilots from USA remained on the tarmac as they came late to Bangalore.

It was evident that Indian defence aviation was set to climb great heights in the coming decade, as the Indian economy sees better days ahead.

The TSUNAMI assistance that India gave to its neighbours was a demonstration of capability and now the rescue work by the Army and IAF in Kashmir, which has had unprecedented snowfall was more evidence of the ability of the Military. A new South Western Command is coming up at Jaipur and the 16th Corps at Nagrota may well split into two with a new Corps possibly 9 or 17. These are heady days –– the IAF is set for more AEW planes and 126 fighters and the Navy for UAVs, ASW helicopters and MR aircraft. The new Type 15A ships may have Brahmos vertical launch if the BrahMos stall model is to be believed. There are revolutionary movements all over India.

Hence the debate whether India was chasing China and likely to catch up somewhat in the coming decade is an interesting one and the media is full of articles on the subject and so we offers excerpts from the latest piece by the New Scientist “India special” issue and some interesting statistics sent in to tell our viewers another facet, besides the facts that emerged at Aero India 2005.

India is sixth in the world for C02 emissions, more due to its industrial activity than the measurement in over valued dollars. India is the world's fourth largest economy and it has eight times the population of Japan. When India reaches one eighth of Japan's per capita income, it will overtake Japan to be the third largest economy. That will happen sooner rather than later. And the world certainly will not have to wait till 2050 for that. Political instability will hamper the speed but not as in the past as the Business Houses of India are determined to gallop ahead.

In the past two years the Indian economy has grown by about 7% per annum in real terms. The rupee has also appreciated by about 10% against the dollar. So India’s growth rate is 12% in dollar terms. Japan made it to the cover page of TIME when it grew at 9% in the 1960s.

The dollar used to be worth Rs 5 and when the exchange rate becomes more realistic than the current $ = Rs 43.50, the Indian economy will definitely show a rapid rise. For the past few years, the Reserve Bank has been buying up dollars in order to keep the rupee down. This cannot go on forever. The Economic Survey and the Indian budget next week will give a good idea of trends in the Indian economy, despite rumblings from the Left and some surprises in Bihar as the Congress appears worried.

Excerpts from "India Special: The Next Knowledge Superpower" in New Scientist are interesting but are already out of date. We are the fourth largest economy, not the 11th. You will find India within the top 5 in the production of food grains, vegetables, fruits, milk, sugar, steel etc. When the whopping $7b of the India Millennium Bonds mature later this year more than half of it will flow into Indian hands as it was probably theirs to start with and it is hot money elsewhere.

We are already the second largest English speaking country. By 2010 we will be the largest and Indians may well modify the language to become more user friendly since Bangalore has 1 1/2 times the number of techies that Silicon Valley has.

AERO INDIA 2005 saw wealth generation and the highend tech jobs that have had a multiplier effect. Bangalore and other tech cities have a developed an eco-system to cater for the needs of these techies. There are Qualis vehicles to collect and drop female workers on night shift and crèches for children. There is a building boom. The Indian commercial airliner fleet will double in the next two years even if half the plans of old and new entrants fructify. JET Airways IPO was over subscribed in 10 minutes. The New Scientist magazine concludes that India is not yet a knowledge superpower. But it stands on the threshold and the following excerpts tell us what is interesting and encouraging about us as there is no hype that would be intolerable to scientists with clinical minds.

“For the New Scientist reporters who have been in India for this special report, many features of the country stand out,” says the magazine. “With a population of more than a billion, the country presents some curious contrasts. It has the world’s 11th largest economy, yet it is home to more than a quarter of the world’s poorest people. It is the sixth largest emitter of carbon dioxide, yet hundreds of millions of its people have no steady electricity supply. It has more than 250 universities which catered last year for more than 3.2 million science students, yet 39 per cent of adult Indians cannot read or write.”

It is against this sober background it informs its discriminating readers, who include the best-informed scientists in the West: “The first sign that something was up came about eight years back. Stories began to appear in the international media suggesting that India was ‘stealing’ jobs from wealthy nations — not industrial jobs, like those that had migrated to South-East Asia, but the white-collar jobs of well-educated people. Today, we know that the trickle of jobs turned into a flood. India is now the back office of many banks, a magnet for labour-intensive, often tedious programming, and the customer services voice of everything from British Airways to Microsoft.”

It points out: “In reality, the changes in India have been more profound than this suggests. Over the past five years alone, more than 100 IT and science-based firms have located R&D labs in India. These are not drudge jobs: high-tech companies are coming to India to find innovators whose ideas will take the world by storm. Their recruits are young graduates, straight from India’s universities and elite technology institutes, or expats who are streaming back because they see India as the place to be — better than Europe and the US. The knowledge revolution has begun.

According to NewScientist: “There's a revolution afoot in India. Unlike any other developing nation, India is using brainpower rather than cheap physical labour or natural resources to leapfrog into the league of technologically advanced nations. Every high tech company, from Intel to Google, is coming to India to find innovators. Leading the charge is Infosys, the country's first billion-dollar IT Company.”

“But the revolution is not confined to IT. Crop scientists are passionately pursuing GM crops to help feed India's poor. Some intrepid molecular biologists are pioneering stem-cell cures for blindness, while others have beaten the odds to produce vaccines for pennies.”

"And the country is getting wired up as never before. Mobile phone networks have nearly blanketed the country and the Internet is even reaching remote villages".

“Looking skyward, India's unique space programme has fought international sanctions to emerge as a key player in India's development. Meanwhile, India's nuclear industry is boldly building cutting-edge fast-breeder reactors.”

There are those who ask: “But why is India, a country that still has so many development problems on the ground, aiming for the heavens? To Indian scientists, the question is not only patronising of their scientific aspirations, it betrays an ignorance of the Indian space programme’s greater purpose and successes against the odds.”

NewScientist provides the answer: “India’s political leaders say the country cannot afford not to have a space programme. Indira Gandhi, who was India’s longest-serving Prime Minister, believed it was not only important for science, but also vital to India’s development.”

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