However, the fact is that India is not living up to the expectations of the global society. Faced with problems in the political and economic sectors of the country, India has now stumbled on its path of becoming an economic superpower. India’s growth rate is diminishing. constantly over 10 percent even in economic recessions, it is now down to five percent, which is low compared with the initial expectations. Its problem of income inequality and economic polarization, which was thought to be solved in the process of economic expansion, has actually become a major barrier in its path. A country that was supposed to be earning more money quickly is now suffering from growing national deficits.

 

Despite the state that India is in right now, it is also an irrefutable fact that India was considered by many to be the next rising state economically after china. Many factors contributed to this expectation. One most major figure that indicated future prosperity was India’s national growth rate. India managed to keep a seven-percent annual growth rate that was steadily accelerating even during the global recession. Furthermore, India has one of the largest work forces in the world that comes from the 1.2 billion people in their country. This enormous population uses English as its lingua franca, making India a popular destination for outsourcing.

 

Apart from these encouraging economic figures, India had other significant factors helping them. For instance, India is the largest democracy in the world based on population. Manmohan Singh, the current prime Minister, proposed various economic reforms during his time as finance minister in the 1990s focusing on making India a stronger country. His reforms promised less regulation in the private economic sector, entering the global market, and restructuring tax policies to facilitate government spending. These reforms were supposed to expand growth, as well as government spending. All the signs were auspicious.

 

So why is India hesitating to become the world’s next economic heavyweight? Reanalyzing India’s status quo, experts are pointing to India’s politics as what is holding India back. First of all, the Financial Ministry of India has been carrying out policies inconsistently and in a fishy manner. There are many instances that indicate the slipshod manner in which the Financial Ministry has been handling its work. Earlier this year, the Financial Ministry tried to privatize shares of its Oil and Natural Gas Corporation (ONGC). when no buyers turned up, ONGC’s shares were bought up by Life Insurance corporation (LIC) of India, another state-owned company. this act of investing within state-owned properties makes these companies unstable and seemingly undesirable, causing Moody’s to devaluate LIC’s credit rating from Baa3 to Baa2.

 

Another instance that explicitly shows the inconsistency of the Financial Ministry is the way it deals with foreign companies in India. In May of 2012, India decided that it would change its tax policy and tax Vodafone, a British company, during its takeover of an Indian telecommunications company. This kind of abrupt change in tax policies, especially ones that burden foreign companies, can make India seem a place unfit for investment since foreign companies will try to avoid damage from unwanted government intervention.

 

Furthermore, the Financial Ministry is also inconsistent in providing all Indian citizens with the benefits of economic growth. Rather than helping to create a hospitable environment for young growing companies, the Ministry concentrated on helping pre-existing large companies to thrive. Granting them easy funding and different kinds of protection from currency fluctuation, they are letting India’s big businesses (many of which are very corrupt) lead India’s economy. Even expanded spending on the social sector by the central government has not had much luck even though the government now spends 18.5 percent of its budget on education and health care. Corruption has stopped the spending from reaching intended beneficiaries. The factors above are worsening the discrepancy between social classes, which is already a huge problem for India.

 

Was It All False Hope?

 

With the problems above and the general problems of corruption, we end up asking whether India becoming a great superpower was all a false hope. Pratap Bhanu Mehta, President of the Center for Policy Research in New Delhi, says, “Few indicators have soured since 2009. Many of the figures and characteristics pointing to rapid growth are still consistent now in 2012.” Even throughout the numerous problems that it has had, India’s household savings rate has stayed over 30 percent. Statistics show that India’s private consumption rate has also remained at a high 60 percent which is a figure higher than that of china. All these numbers show that the Indian economy is still active and growing with the citizens keeping their savings steady. With the current level of savings, Indian companies can easily invest at the right moment. Also, the general public has started to believe in education and investment.

 

These signs are all great indicators showing that India’s future is still bright. To reach the bright future, they must first overcome inner political problems that they face. professor woo Jun-Hee (political science and International relations) addressed this problem when she said, “India must seek to solve its social and bureaucratic problems for it may hold them back. If they fail to expand the purchasing power of India by solving poverty, it will hinder them greatly.” By keeping their policies steady and their government system corruption free, India will prove that “expectations for India’s were not baseless, but merely postponed.