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Source: The post is based on an article “Let’s reflect on what’ll make India a developed country” published in Live Mint on 9th December 2022.
Syllabus: GS 3 – Economic Development
Relevance: characteristics of a developed nation
News: The External Affairs Minister S. Jaishankar during his recent United Nations General Assembly speech has told the world about India’s ambition to become a developed country by 2047.
How is a country considered developed?
There is no exact definition of a developed country. The World Trade Organization (WTO) has no technical classification for a country’s stage of economic development.
Countries are generally considered developed based on the size of their GDP, per capita income of their citizens along with the presence of high-quality infrastructure.
However, members of the Development Assistance Committee (DAC) grouping of OECD is generally considered to be among the world’s most developed countries.
Therefore, India to be called a developed country can refer to the parameters adopted by the countries of DAC.
What are the characteristics of the countries of DAC?
First, most of these countries are home to the world’s largest multinational corporations. These MNCs earn a huge amount of money contributing to the GDP of the nation.
Second, these countries are net exporters of high technology, high value goods and services. This helps most of them run a current account surplus and invest in research, improving their factor productivity and profits.
Third, these countries have large multinational banks. These big banks provide cheap credit access to the people and business which in turn helps in the growth of the countries.
Fourth, currencies of these countries have global value. This helps the central bank of those countries to influence the capital flows across the globe through various monetary policies.
Fifth, these countries have active citizen groups that help organize their economies. The citizens of these countries understand their responsibilities in nation-building and take up the responsibility actively.
Sixth, these countries have successfully eradicated absolute poverty and provide some form of minimum living standard to their citizens like basic health care, unemployment benefits, etc.
What is the way ahead for India?
India is on the path of achieving the characteristics of a developed nation in the coming 25 years. However, this can only be possible if proper strategies are adopted along with the collective efforts of its citizens.