our setting of democratic compulsions, but there are grounds for optimism. third, and perhaps the most challenging issue relates to development of agriculture. while over 60 per cent of the workforce is dependent on agriculture, the gdp growth generated from agriculture is only marginally above the rate of growth of the population, which is not adequate to ensure rapid poverty reduction. the results of recent surveys on poverty in india, however, provide grounds for optimism in regard to accelerated reduction in absolute poverty since the reform period. to facilitate a more rapid growth in agriculture, legislative, institutional and attitudinal changes to supplement enhanced public and private investment are needed. there is an increasing recognition of this issue among policy makers. fourth, delivery of essential public services such as education and health to large parts of our population is a major institutional challenge. it is strongly felt that education will empower the poor to participate in the growth process and the large gaps in availability of health in terms of minimum access to the poor needs to be filled. similarly, the judicial processes need to be aligned with the compulsions of a fast - growing globalising economy, especially in terms of timeliness. all these are being intensely debated, and one should hope for significant improvements. strengths of the indian economy there are certain “ not easily quantifiable strengths ”, which our economy possesses and i would like to highlight them here. first, a vast pool of science and technology graduates and the millions who are familiar with english language are sources of strength for the emerging india so far. india is a country of great diversities but with incredibly harmonious co - existence of various religions, languages and a unified culture. the familiarity with multiple languages in india prepares the people to adapt better to multi - lingual environment, making it easier for them to fit into international systems very smoothly. second, india also enjoys the distinction of being the largest democracy of the world. the existence of a free press provides some insurance against excesses and makes governments at all levels more alert and accountable. third, the political climate is characterised by what may be termed as political system stability, despite the coalition cabinets and periodic elections both at the centre and in several states. fourth, india will remain one of the youngest countries in the world in the next few decades. this “ demographic dividend ” is seen as an inevitable advantage provided prerequisites such as skillupgradation and sound governance to realize it are put in place. more important, the demographic transition is likely to

of the region with rest of the world. today, asia holds foreign exchange reserves of us $ 3 trillion, which is 62 per cent of total foreign exchange reserves of the world. further, the asian region has increasingly become a major center of world trade, global capital flows and other macroeconomic parameters. today, the contribution of asia to global trade has increased substantially to about 27 per cent. dynamics of asian economic integration there is increasing integration within asia, as reflected in the pace of change in intra - regional trade flows. intra - regional trade is growing as countries have positioned themselves at different stages of a regional supply chain. the rise of china and india is helping asia to not only grow but to become more integrated. asian countries are working to create a cohesive asian community that allows for both complementary growth and positive competition. this phenomenon has been facilitated by an array of free trade agreements ( ftas ) in asia. intra - asian trade as a share of the region's total trade has risen to more than 50 per cent in 2004 from about 30 percent in 1980 ( imf, 2006 ). in less than 10 years, trade between china and the rest of asia increased fourfold ; trade between china and japan / korea tripled over the same period ; intra - asean trade doubled, and trade between asean and india has tripled ( mandelson, 2005 ). in recent years, there is an impressive ongoing transformation in the composition of production and trade within asia as the comparative advantage of many asian economies continues to change. in particular, economies with relatively high wage costs are shifting toward higher value - added products, including services. the shift of labor - intensive manufacturing out of hong kong into mainland china and the associated boost to hong kong ’ s economy from the growth of trade in financial services is perhaps the most appropriate example of this on - going process. financial flows within the region have also become more significant. although the developing countries of asia still rely on london and new york to intermediate foreign savings of the region, japan continues to remain the world ’ s largest exporter of capital. moreover, hong kong and singapore, with their well - capitalized banks, efficient clearing and settlement systems, and expanding range of financial products, have also emerged as major financial centers. increasingly, these centers are intermediating savings within asia, as well as channeling saving to asia from other parts of the world. in particular, hong kong is the main conduit for investment in china and arranges a