Thursday, February 10 2005 19:18 Hrs (IST) - World Time -

Chennai: Despite being "star performer" in terms of economic growth, India will take at least another 34 years to achieve the GDP level of the United States in 1950s, a senior World Bank (WB) economist said in Chennai today (Feb 10, 2005).

"India is growing faster, but from a low base. At current rate (of growth), India would reach USA's 1950s (GDP) level in 34 years," said Dr Lant Pritchett, lead economist, World Bank, addressing a symposium organised by The Loyola Economics Association for Development.

Assuming that Indian economy continues to maintain the current growth rate, it would take another 61 years for the country to catch up with the current economic level of the United States.

"Not in your lifetime," he told an audience, comprising mainly college students.

However, Pritchett said he was "bullish" on the country's growth prospects and added that India was a "rich country waiting to happen."

"India is a rich country struggling to free itself of the trappings of poverty. It should not think of itself as a poor country struggling to be modestly less poor," he said.

He said a steady economic growth was good for the country and cautioned against an accelerated pace.

"The ride will be bumpy the faster it (economy) goes," the World Bank official said.

Pritchett said the transition of the Indian economy into a successful economy would create social pressures. "The social process is going to be tough. Nobody is saying it will be a smooth process," he said.

However, India was also not facing the threat of an economic catastrophe as its economy was not "booming", he said, drawing a parallel with Brazil and some South Asian economies, which boomed, before going bust.

The major risks facing the country were the lack of fiscal means to meet the infrastructure needs, the lagging regions (such as Bihar) in the growth process and bad infrastructure, Pritchett said.

The private sector could only fund part of the growing infrastructure requirements and a major portion must come from the public sector. This would create pressure on the fiscal deficit, he said.

On the income distribution, India fared much better than many other countries during the last decade. "India is more equal than any other growing economies. In China, income inequality has increased dramatically in the 1990s," he said.

However, in terms of absolute indicators, there has been incredible growth in living standards for a large portion of the people in China, he said, explaining that there would be "enormous social pressures as Indian economy takes off," but still it was the better option.