Bangalore has transformed itself from a provincial capital into a world class centre for the global IT industry. Mumbai is a thriving commercial centre. MNCs are outsourcing backroom functions and call centres to India, attracted by India’s highly skilled, English speaking, and cost competitive professionals. In manufacturing, India is doing well in automobile, pharmaceuticals and chemicals. The recent BJP victory in state elections is widely seen as the Indian people reaffirming their support for reforms. The current thaw in relations with Pakistan is another positive sign. Worldwide, people are becoming persuaded that the momentum for economic liberalization that has built up is irreversible. A subcontinent is on the move. Nowhere is this more evident than in the self-confidence of Indian companies. As one consultant commented, 5-10 years ago his assignments in India were about how to withstand the competitive threat. But today the question is how to grow the companies beyond India. Therein lies an opportunity for India and Singapore to work together. Responding to globalisation Both India and ASEAN are opening up, reforming their economies, and pursuing the path of globalisation. The rapidly changing and highly competitive environment requires countries to make many changes in policies and strategies, and to cooperate more closely with others, especially in the region, for mutual benefit. Internal restructuring Singapore, being such a small and open economy, feels the need to remain competitive, adapt and upgrade most acutely. We are getting used to the fact that there is no more life-time employment or iron rice-bowl anywhere in the world.
These enduring traits are embedded into our geography and culture, and will serve us well for many years. India since the early 90’s India too has been opening up since the early 1990s, although not at a uniform pace. Since independence, India had adopted an economic model that emphasised self-sufficiency, strong central planning, and the state controlling the commanding heights of the economy. By the late 1980s this model had run into difficulties. In 1991 Prime Minister Narasimha Rao started to deregulate and open up the Indian economy. Countries in Asia watched with close interest successive budgets of Finance Minister Manmohan Singh, as decisions that had hitherto been made centrally were devolved to the private sector, the Rupee was devalued, subsidies were reduced, state-owned enterprises were privatized, and industries opened up to competition and foreign participation. They looked forward to a dynamic, prosperous India, participating fully in the regional economy. But the political situation in India changed after several years, and the pace of reform slowed down, or so it seemed to those watching India from afar. However, in the last few years under the BJP government led by Prime Minister Vajpayee, not only have the reforms resumed, but a new spirit and vigour have manifested themselves across the country. Last week’s mini-budget announcements show the resolve of the government to press on with the reforms. 2  BIS Review 3/2004  India is now a fast growing economy.