With one of the world’sfastest-growing economies, India is a brightspot in a lackluster global environment.In the past three decades, per capita incomes have quadrupled, poverty has retreated, illiteracy rates havetumbled, and health conditions have improved. An expanding economy has provided the much-neededresources to address chronic infrastructure deficits and improve the lives ofmillions.India is now poised to transition to a higher and more widely shared level of prosperity: by 2047—thecentenary of independence—most citizens could join the ranks of the global middle class. Households inthe global middle class can fulfill a range of aspirations, such as safe and affordable housing, health care,education, clean water, sanitation facilities, reliable electricity, a safe environment, and discretionaryincome to spend on leisure pursuits. Achieving these goals requires incomes well above the extremepoverty line, as well as vastly improved levels of public service delivery. Projections suggest that for this tooccur, rapid growth (of 8 percent or more) will need to be sustained for approximately the next threedecades.And while the promise of amiddle classIndia may appear to be tantalizingly close,success is not necessarilypre-ordained. Most countries that grew rapidly in one decade, decelerated in the next. In East Asia, forexample, growth traps appear to have emerged from a shortage of low-wage labor, partly a consequenceof demographic change. Growth slowdowns in Latin America and Africa’s mineral-dependent economieshave mirrored commodity price cycles. India’s economic constraints are different. Unlike East Asia, there isan expanding share of young adults in India, so there is limited risk of sustained wage increases for lowskilledworkers. And unlike Latin America, India is a net importer of minerals, timber, and many othercommodities, so that India’s growth does not fade with declining commodityprices.India is distinctive in other ways too. It’s size and immense diversity suggest the need for remedies that fitits particular circumstances. Space age industries, high-tech agriculture and elite colleges thrive alongsideprimitive workshops, subsistence farms and schools that impart little knowledge. Prosperity and povertyalso live side-by-side. India is simultaneously home to the 3rd largest number of billionaires in the world,together with the highest number of poor people in the world. As a result, policy reforms must navigatethis considerable diversity, take into account the scale of the country, and respect a robust administrativeculture that requires change to be indigenized and contested in order to be acceptable. The accompanyingvolume 2 of the SCD provides a summary of the main comments and debatesthat ensued during the reviewand consultation process of this document.
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