We choose India to be an observational country because India links with Hong Kong,
dating back to the 1840s, have led to the territory having one of the larger Indian
communities abroad, with current estimated numbers being about 35,000, of whom nearly
23,000 hold Indian passports. Due to their long presence, the Indians have been able to
integrate themselves into the mainstream of Hong Kong life, as can be seen by the number
of second- and third-generation persons of Indian origin who speak fluent Cantonese and
feel quite at home in Hong Kong.
On the other hand, India as the same as China, the worlds largest democracy, with the
second largest population that reached 1.02 billion in 2001, is also one of the largest
developing countries in the world to have gone in for a major revamp of its economic
structures over the past decade.
The India Governments policies are relatively simple, transparent and geared towards
promoting domestic and foreign private investment. External trade has been liberalised
through lowering of tariffs and progressive reduction of import controls. Tax rates, both
corporate and personal, have been rationalised and compare favourably with other major
world economies.
The Indian economy has, since 1991, undergone profound changes not only in its
direction, but also its fundamental structures and underpinnings. The deliberate change
from a command economy based on a socialist market model to that of a market economy
with a human face has led to major readjustments. As a result, there has been greater
reliance on technology, improvement of systems, streamlining of procedures relating to
approvals, and general reduction in the involvement of the government in the business of
running businesses. These changes have been reflected across the Indian economic
landscape, resulting in a faster growing economy, with increasingly stable fundamentals.
At the same time, the economy has also been able to integrate itself into the global
economic mainstream, with participation in global multilateral institutions, and a
willingness to accept new ideas and challenges.
Benefits of the reform process are visible in the form of better growth rates, higher
investment and trade flows in the post liberalisation era. The inherent strength of the
economy is borne out by the fact that it has achieved an annualised average rate of growth
of 6.5% over the past decade. This is targeted to grow to 8% over the course of the next
Five Year Plan, with the aim of doubling the GDP within the next decade.
