Where do you think the Indian economy is headed in the next 5 years?
Indian economy currently highly depends on its abundance of work-force. People are forced to work long hours for relatively low pay, allowing India to depict itself as a ‘low-wages’ country. As soon as the workforce is depleted, or labour-prices are going to rise, the party will be over for India. So, it all depends on whether India will be able to keep its rates low, otherwise the global economy will shift from India to a new country, like China, which still has a VERY large workpool available, and even lower labour-costs. My guess: no, they won’t bea ble to keep up their 9% growth for 5 years.
IT growth should continue, but will probably start to slow. The price advantage of outsourced IT is dropping every year and more and more companies are having trouble with their outsourcing. I think it will continue to be incredibly successful for large companies that set up their own campuses and for small companies that start with an outsourced development model. The ones who will continue to have problems are established companies that think they can start cutting costs by partnering with an Indian firm. These are the ones that find the high turnover rate and communication issues to be a big problem. I think you’re going to start to see significant growth in real estate. Friends over there are already telling me how expensive it is to get nice houses or apartments in the big cities. As more people get disposible income, buying their own home is a natural thing to do. If you squint a little bit, it’s not unlike how things were in the US in the late 1800s, early 1900s. A wealth class