k c chakrabarty : challenges and opportunities in a trillion dollar economy address by dr k c chakrabarty, deputy governor of the reserve bank of india, at the associated chambers of commerce and industry of india ’ s ( assocham ) national banking conclave, new delhi, 17 june 2011. * * * the assistance provided by ms p b rakhe in preparation of this address is gratefully acknowledged. shri pranab mukherjee, hon ’ ble finance minister, government of india, dr narendra jadhav, member, planning commission, shri dilip modi, president, assocham, shri r. n. dhoot, senior vice president, assocham, and mp, rajya sabha, shri j. m. garg, central vigilance commissioner, dr thomas mathew, jt secretary, capital markets, ministry of finance, shri m. narendra, chairperson, assocham national council for banking & finance and cmd, indian overseas bank, shri t. m. bhasin, cmd, indian bank, shri m. v. tanksale, ed, pnb, shri n. seshadri, ed, bank of india, shri d. s. rawat, secretary general, assocham, distinguished guests, ladies and gentlemen. it is a pleasure and privilege to be here at the national banking conclave on the theme “ challenges and opportunities in a trillion dollar economy ”. as you are aware, the indian economy reached the trillion us dollar gdp milestone in 2007 and joined other countries of the trillion dollar club, namely, the us, uk, japan, germany, china, france, italy, spain, canada, brazil and russia. in fact, over the period 1960 to the late 1980s, india ’ s gdp in us dollar terms doubled every nine years, on an average. since then, the period for doubling has declined to around 5 years, coinciding with the initiation of wide - ranging structural reforms. with india ’ s gdp at current market prices during 2010 – 11 already placed at around us dollar 1. 7 trillion, it is expected that the indian economy would cross the us dollar 3. 4 trillion mark by 2015 – 16, i. e., well within the span of the ensuing ( twelfth ) five year plan. therefore, as policy makers and business leaders, we should be thinking about exploiting the opportunities and preparing ourselves for the challenges of managing a multi

and mortar structures. while the initiatives being taken are laudable, there is a crying need for reforms in our educational system which requires to be toned up to impart education that is focused on the demands of the new millennium. effective delivery of educational inputs in a large economy like india requires a critical mass of volume and quality. in this regard, the government programmes such as sarva shiksha abhiyan ( ssa ) in the elementary education sector and rashtriya madhyamik shiksha abhiyan ( rmsa ) in the secondary education sector helped in achieving the universalisation of education to a very large extent in terms of access to schooling and improvement in gross enrolment ratio. even then there is a pressing need to further increase school enrollments, along with improvements in the quality of education. this may be extremely important in harvesting the fruits of investment. in this regard, the enactment of right of children to free and compulsory education act, 2009 and the operationalisation of article 21 - a of the constitution of india, are expected to address the issues of drop out, out of school children, quality of education and availability of trained teachers in the short to medium term. further, a proposal to set up a national commission / council for higher education and research to prescribe academic quality and advancement of knowledge in higher educational institutions is under the consideration of the government. yet another well known problem is the mismatch between quantity and quality of education. according to the research published by the observer research foundation ( 2010 ), india recorded 10. 4 per cent increase in the number of graduate engineers in 2008 compared with 9. 9 per cent in china, 5. 9 per cent in south korea, 3. 9 per cent in uk and – 1. 0 per cent in the us. however, despite the increasingly higher numbers of engineering graduates produced by the technical institutes in india, almost 30 per cent of fresh graduates remain unemployed even one year after graduation. in 2005, a mckinsey - nasscom study indicated that only a quarter of india ’ s technical graduates and 10 – 15 per cent of general college graduates are of employable quality in the off - shore it and bpo industries. further, nasscom estimates that the educational system produces nine half - literate graduates for each graduate of passable quality, reflecting the low quality of education. however, despite discounting of the quality of education, when it comes to the number of engineers per million people, india has only 214