Dr. Swamy’s 2002 prediction has come true

Dr. Swamy predicted in 2002 that India will be the third-largest economy by 2020, after the US and China

Dr. Swamy predicted in 2002 that India will be the third-largest economy by 2020, after the US and China
Dr. Swamy predicted in 2002 that India will be the third-largest economy by 2020, after the US and China

Dr. Swamy had warned in a 2002 article about 1991 reforms

In the Spring of 2002, Dr. Subramanian Swamy had published an article with “Harvard Asia Pacific Review” titled “Can India Make It?”.[1]

He made a bold prediction in 2002 that India will be the third-largest economy by 2020, behind the United States and China.

Here is a snippet of Dr. Swamy’s concluding paragraph:

Dr. Swamy's prediction about Indian economy in 2020
Dr. Swamy’s prediction about Indian economy in 2020


Incidentally, in the same article he had pointed out 4 main struggles in the Indian economy, or as he called it “The four main areas of retardation”:

  1. High fiscal deficit as a percentage of GDP, which leads to crowding out of private investment and the banks’ capacity to lend.
  2. No consensus on whether the reforms thus far have been effective in alleviating poverty.
  3. Unequal distribution of growth, posing social challenges to the federal structure of the democracy.
  4. The growth impulses of India have been range-bound between 5% and 8%.

While it is widely accepted that Dr. Swamy developed the blueprint of the 1991 reforms, he had warned in this 2002 article that the 1991 reforms were limited to the “product markets” such as abolishing industrial licensing and import barriers.

However, the “factor markets” had remained largely untouched and hence warranted the second generation of reforms. For examples:

  • Labor market
  • Land market
  • Capital markets
  • Natural resources market

He also placed special emphasis on financial sector reforms. The following quote held relevance all the way through 2016: “India’s present laws of bankruptcy and corporate control require reforms so that the market for corporate control can become competitive.”

He has maintained since 2002 that crony capitalism and misallocation of resources have plagued India for too long and that the independence of regulatory and monetary authorities such as the Securities and Exchange Board of India (SEBI), Telecom Regulatory Authority of India (TRAI), and Reserve Bank of India (RBI will be crucial for the coming decades.

Lastly, he had warned in 2002 (by studying graphs of the efficiency frontier and the coefficients of variation for Return on Investment (ROI) between India and China) that in the absence of the second phase of reforms, China was well placed to grow faster than India and would likely attract more FDI, especially after its inclusion in the World Trade Organization (WTO).

Looking back, Dr. Swamy’s article in 2002 was staggeringly prescient on multiple levels. He was ahead in his predictions and clinical analyses by two decades, raising a serious question: Has India really utilized his talents well?

1. The views expressed here are those of the author and do not necessarily represent or reflect the views of PGurus.


[1] Can India make it? India’s path to sustained growth: An economist’s perspective – Harvard Asia Pacific Review

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  1. Dr. Swamy’s 2002 prediction has come true.
    Dear Rishikesh Muchhala. Thanks for reminding us.
    Similarly, I guess during Sept 2015 Dr,Swamy wrote an article/ wrote a letter to head of the Majboot Sarkar lead by PM Modi on our Economy going SOUTHWARDS!

    Look at his predicted YEAR 2015 based on facts and figures of UPA1&2 and PM Modi’s the then 18 months in power proved 100% correct as on precovid 23rd March 2020.

    Only an intellect strong in Stats and Math fundamentals can foresee the future of the Indian Economy!
    Dr.S.Swamy is not a sooth sayer! He is a professor not a rabble rousing politician!

    It is unfortunate that neither RSS nor BJP is understanding this TRUTH within its OWN RANK and FILE but looks at ACT OF GOD! Congress-I was far better in utilizing the services of many good intellects within its own party though produced massive scams behind those peoples backs!!

    After watching RSS and BJP for 40 years, I am convinced that even under the favorable majority Govt of its OWN fails to utilize services good gentlemen or recognize talents.

    Finally BJP spoiled its case and face value that it does not have an Economic Policies of its own!!
    I am convinced that those who speak up for instance talented Nitin Gadkari was SILENCED.

    The present incumbent Govt wasting time and lost opportunities during nation wide lock down for six months and failed to look at legal, admin and economic reforms!!

    At the end Dr.S.Swamy remains evergreen and a STATESMAN in RSS/BJP has produced.

    • Narasimha with due respect to you, I recall Dr.Swamy said 1US$ cab become Rs.45.

      You might be referring to Dr.Swamy saying 1US$= Rs.1.00 at the time of independence. Dr.Swamy did considerable works on ancient /200 years trade with West Asia and Europe and the Indian DGP was 53%!!!!!
      If RSS assumes adamant attitude before PM Modi, Dr.Swamy can be given FM portfolio with wide marshal kind of powers to make a turn around in our Economy within two months. As along as mental faculties are good one should work and take services.


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