India in the year 2020

India's foreign reserve is around $131 (as of Jan-1 2005) billion dollars. However, what is disturbing is our GDP and Labor force distribution.

GDP¹ (Gross Domestic Product) Distribution.

- 25% is from Agriculture
- 30% is from Industry (of which 19% is manufacturing)
- 45% is from Services & Information Technology

Labor Force: 470 million

Labor Force Distribution

- 60% Agriculture
- 23% Industry
- 17% Services & Information Technology

The decline in the contribution of agriculture towards GDP for the past two decades is in sync with the growth pattern of any developing country. The share of agriculture in the GDP has shrunk to 25% in 2004 from 40% two decades ago. However, the labor force reduction was only 10%, i.e., from 70% two decades ago to 60%.

	INDIA				China		USA
	2004		2020		2004		2004
	GDP	Labor	GDP	Labor	GDP	Labor	GDP	Labor
Agriculture	25%	60%	10%	15%	14.8%	50%	1.4%	2.4%
Industry	30%	23%	35%	35%	52.9%	22%	26.2%	24%
Services & Others	45%	17%	55%	55%	32.3%	28%	72.5%	73%
Labor Force	470 Million		700 Million		778.1 Million		146.5 Million
Public Debt2	59.7 % of GDP				30.1 % of GDP		62.4% of GDP
Exports	$57 Billion				$436 Billion		$714 Billion
Imports	$74 Billion				$397 Billion		$1.26 Trillion
GDP per Capita3	$2900.00				$5000.00		$37,800.00
PPP4	$3.033 Trillion				$6.449 Trillion		$10.99 Trillion
GDP Real Growth Rate5	8.3%				9.1%		3.1%

The transformation in the GDP is typical of developing country experience. However, if you look at the labor force distribution, we find that 75% of the GDP contribution comes from 40% of the labor force.

All successful developing economies moved significant numbers of people out of agriculture as the share of agriculture in the GDP declined. The developed nations' GDP (see US) shows this fact.

So, over here, 60% of (Labor force) our population is dependent on Agriculture, and imagine the chaos it will create when there is monsoon failure. Another misconception is that while China has become the world's factory, India has become the world's knowledge center in the last 10 years – which looks better on paper. China did the right thing in the previous 15 years to transform its agricultural labor force by bringing in industrialization, which is natural progress (Agriculture to Industry to Service). Thanks to the liberalization of the early 1990s, India did pretty well in the last 15 years. However, we did pretty well in the Service and IT (Information Technology) sectors, neglecting our Agricultural labor force. So, to bring our 60 Agriculture labor force down to 15% – 20% (i.e., approximately 220 million people), we need to create more jobs in our industry sector and have a good plan and commitment to do the transformation.

We (India) could become an economic giant in 2020 if we could move people from Agriculture to other industries. We need governments who could see into the future to do this transformation.

The question over here is –

WHAT CAN WE (The people of India) DO TO HELP THIS TRANSFORMATION?

1. GDP – Gross Domestic Product is the value of all final goods and services produced within a nation in a given year.

2. Public Debt – All government borrowings minus repayments denominated in a country's home currency. It should not be confused with external debt, which reflects the foreign currency liabilities of private and public sectors and must be financed out of foreign exchange earnings.

3. GDP Per Capita - GDP on a purchasing power parity basis divided by population.

4. PPP – Purchasing Power Parity (2004 estimate).

5. GDP Real Growth Rate - GDP growth is annually adjusted for inflation and expressed as a percent.