In the past three decades, Chinese firms have expanded their presence in India, building their business, creating jobs and becoming key economic players in the nation’s third-largest economy.
Now they are entering the country’s biggest cities, and they are making a major push to tap the burgeoning middle class that the country is hoping to lure back with a $17 billion stimulus package.
In an exclusive interview, the countrys chief economic adviser said India has a “long way to go” in meeting its promises of prosperity for its workers and that the government must do more to help them.
“India needs to take care of its citizens, the middle class and the elderly,” said Arvind Subramanian, a former Indian foreign minister who now heads the Centre for International Policy Studies in New Delhi.
“We need to address the issues of poverty and inequality that are prevalent in India.
We need to be much more proactive in the way that we manage the country.”
He said India’s leaders have an opportunity to “rediscover the values that they learned in the 1990s,” when the country was still known as a backward, rural state.
“The future is bright for India, and the next 10 to 20 years will be really exciting.”
Subramania’s comments echo a recent report by the Centre For Indian Policy Studies, which said that by 2025, the number of Indian workers who could claim job security and a pension would increase to over 1.1 million, up from 1.2 million in 2018.
The report projected that in 2025, nearly three-quarters of the Indian middle class will be comprised of women, and one-quarter of the workforce will be aged 65 and older.
India is building on the economic gains it has made in recent years, but the country faces major challenges.
It has struggled to attract foreign direct investment (FDI), the financing that many countries require to grow their economies.
China has been a major driver of the country s FDI growth, which is projected to reach $3.5 trillion by 2025.
But many Indian companies have been reluctant to invest in China, fearing the government will clamp down on foreign investment.
India’s growth is expected to continue to stagnate this year, with gross domestic product growth slowing to 6.7 per cent, according to a World Bank forecast released in January.
On Tuesday, the government unveiled a plan to address a key challenge of the coming year: unemployment.
The government is expected on Wednesday to announce the creation of a new job creation agency that will help companies recruit and retain employees.
“This is the moment for India to be more aggressive in addressing the issue of joblessness,” said Subramanyan.
China has been one of India s top trading partners since it opened a trade route in 1972.
India has become the second-largest importer of Chinese goods, and has a high-level trade deficit with the country of $3 billion.
Subramanyam also slammed the government for failing to invest its money in the country.
He said India needs to invest more in the public infrastructure projects it needs to compete in the global economy, such as railways, ports, water and power, highways, power grids, ports and airports.
The government has promised to invest at least $2.6 billion a year in infrastructure projects for the next decade, but has so far been unable to find any money.
In his report, the Centre also noted that India is in dire need of an investment boost to spur its economy, especially in sectors like infrastructure, ports construction, energy, mining, telecom and agriculture.
Over the next few years, the economic situation is likely to deteriorate further, Subraman warned, adding that it will be a major challenge to build up a strong, modern economy.
India is set to announce a package of stimulus measures next week, including a $4 billion stimulus for the economy, and Subramani said the country will need to boost its investment rate by a further 1.5 percentage points.
Read more: India is on course to record a $2 trillion deficit next year, but no big plan for the future is in sight.
Ajit Prakash, a veteran economist at the Centre, said the government needs to do more than it is doing now to encourage private investment and to provide tax incentives to firms to expand their operations.
However, he said, India needs some more aggressive measures to encourage the private sector to create jobs and to invest.
Indias central bank governor has repeatedly warned that the rupee will likely strengthen against the U.S. dollar in the coming months.
Prime Minister Narendra Modi has been trying to revive growth, and a new stimulus package will help ease the pressure on the rupees value, Prakish said.
But even with such stimulus, India is facing challenges.
According to the government, its gross domestic investment rate is set at 7.7