INDIA’S GROWTH AND DEVELOPMENT

THE SEVEN PER CENT HITCH

Unlike many developed nations, India can't afford to lose more points if its development and growth is to have any meaning

Praveen Dass & Atul Thakur

The Times of India, February 19, 2012

This really should be dubbed the winter of our economic discontent. India's GDP growth rate has shrunk and should settle somewhere around 7%. Yet finance minister Pranab Mukherjee and his mandarins keep brushing aside worry and castigating doomsayers. They point out that even 7% is robust growth when seen in the light of a global economic recession. Just how bad that recession is may be inferred by even a quick look at GDP growth figures of several Western countries for 2011. Many barely make it past 2%. An analysis of GDP growth over the last six years paints an even grimmer picture for such nations. Only China, with a whopping compound annual growth rate (CAGR) of 10.6%, and India (8.2%) come out on top of the class. So the spinmeisters are right, but not quite.

Unlike many developed nations, India - and for that matter China, too - simply can't afford to lose any more percentage points if its growth story is to have any meaning for most its citizens over the next decade or two. For a nation with one-fourth of its population still languishing below the poverty line, such high growth rates are necessities, not a luxury . Besides, all such growth figures for India and China (and indeed, for any large emerging economy) also need to be interpreted from that perspective.

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