India Looking Towards a Fruitful Decade For Its Economy

Charles Darwin said, “It's not the strongest of the species that survive, nor the most intelligent but the ones most responsive to change.” Looks like the Indian government has taken some inspiration from those words. In the current decade, that is between financial year 2011 and 2020, India is set to enter a new era of inclusive growth. The results will be visible in the larger population soon, an aspiration that was missing till now.

BIMAROU is the term used for the states of Bihar, Rajasthan, MP, Orissa and Uttar Pradesh, for not using their man power and resources efficiently. They account for 34.7% of the country's geographical area and 40.2% of the population, and yet contribute only 21% to the GDP.

Ever since the country's independence in 1947, a need for more equitable growth was recognized but the efforts to uplift the weaker sections of the society started only recently. The BIMAROU states lagged here as well, and although it will take more time for fully inclusive growth, the current decade will definitely see huge progress in this regard.

Reason for This Strong Belief

Many a times, people tend to associate development with political aspirations alone. However, there is a bigger picture being painted in this South Asian country. There is a significantly large untapped market in the rural parts and to unlock this potential, the government as well as private companies are taking important steps. By the end of 2020, there is expected to be a massive improvement in terms of infrastructure, education and healthcare.

There is also a special focus on improving the condition of the financial services in the country. Services like endowment policies are being encouraged. For example, Bihar has the lowest per capita deposit and credit, which means there is a huge potential market for endowment policy there.

How Some of the Indian States are Expected to Behave in This Period

• The share of the eight larger states of the country, the BIMAROU states as well as Gujarat, Andhra Pradesh and Maharashtra, in India's GDP is expected to grow from 51.5% in 2010 to 55.9% in 2020.
• The contribution of the BIMAROU states alone will be 24%, an improvement from 21%.
• Maharashtra is expected to be the largest contributor, at 15.6% in 2020, although Gujarat is likely to leave it behind in terms of per capita income.
• The per capita income of Madhya Pradesh and Bihar is expected to triple in this period.

Many financial companies are expected to invest in these states in the coming years, driving this growth. Investments made in endowment life insurance, retirement plans, etc, will also yield good results. State governments have taken important steps to attract investors by improving the infrastructure as well.