ESSAY : Outlook for Indian Economy over the next 2-5 years Background on Indian Economy: It is a well known

universal fact, that currently, India is the second largest developing economy in the world behind China. The road to establishing the current position was not smooth, with hurdles faced by the economists during every reform announced by them since the 1980s. Indian economy saw a paradigm shift in its momentum in the late 1980s, when the then Finance minister Manmohan Singh emphasized the need for globalisation and opened the doors to various foreign companies to invest in several industries. As part of the overall reforms, various Public Sector Undertakings ('PSU') were privatised and foreign ownership was allowed subject to Foregin Direct Investment ('FDI') norms for the specific industry. One of the greatest assets for India has always been its cheap labour force and in the early 1990s, a majority of this force represented educated middle class people who had started to change their mentality that working for the private sector was equally enriching and secure as working for the PSUs. Hence, global MNC's were able to set up shops in India as they had quality work force that could service their requirements at cheap prices. This served well for the growth of the Indian economy for close to couple of decades from the 1990s as the boom in the Information Technology ('IT')industry coincided well with the availability of quality labour force at cheap rates. Also, in the early 2000, most of the companies or large organisations in USA had started to downsize costs and were looking at cheaper alternatives to service their customers. The Indian business market made use of this opportunity well by opening Business Process Outsourcing ('BPO') centers across the whole of India providing quality employees who could communicate in English at at prices that would reduce the companies cost by close to 80%. The BPO boom started in the early 2000 and has been continuing for a decade. Outlook for the next 2-5 years: Indian economy's outlook for the next 2-5 years has been tried to be analysed from an indsutry perspective with specific focus on 3 indsutries being Retail, IT and BPO. Retail: The recent announcements of opening up the retail sector to the global world will have a huge impact on an economy where the sheer size of its population will attract lots of foreign investments from all over the world. If the current FDI norms on retail are maintained, then it would serve the economy well with lot of money being pumped into the economy by foreign companies, thereby increasing India's foreign exchange reserves. IT: The Indian IT industry which has had a dream run from the 1990s has started to reverse a bit due to the overall global economic melt down and due to companies cutting down their IT spend. If the global economy revives, then there is a possibility for this trend to be reversed, which will have a positive impact on the IT industry in the country. The revival of the global economy is expected to happen in about 3 years time and hence we hope that the IT industry will begin to improve in about 3 years.

 BPO: "Make hay when the sun shines" applies aptly to the Indian BPO indsutry as many companies set up shop in the 2000s to make use of the BPO boom. However, the last 2 years have not been good with increased competition from neighbouring countries in Asia like Philipines, Vietnam etc. This trend seems to continue and unless infrastrucuture capabilities are not enhanced, it would be very difficult for the Indian economy to regain lost ground. Hence, outlook for the industry seems to be bleak with no chances of revival in the near future Also, other important factors which affect the outlook negatively in the next 2-5 years are political instability, corruption and increasingly difficult business conditions. Apart from these there are other factors like poverty, illetracy etc that seem to hamper the growth of the Indian economy. Conclusion: It will be extremely vital for the beareaucrats and politicians to set aside their differences and work on erdicating corruption and make life easy for the global oraganisations to carry out business in India. This by itself will have a positive impact on the opportunities that will be made available to the working class and as a cyclical effect carry the economy forward.