India's rapid growth of the past several years bears the hallmarks of economic takeoff which, in earlier decades, had taken place in other Asian countries. Our recent economic growth has stunned the world which until then believed that a Hindu Growth Rate of 3-4 per cent was the best achievable. The Indian economy has witnessed an exhilarating phase of growth with the GDP growing at at a rate of more than 8.5 per cent for the last four years.
This robust growth, however, should not be dismissed as an aberration. At the same time its sustenance is not automatically guaranteed and the government needs to persevere with its reforms to ensure that both the rate and quality of growth is maintained. Economic growth is the seed for future socioeconomic prosperity.
India has potential to grow at 10 per cent or so annually over the coming years. Consistent with being one of the world's fastest growing economies, it is likely to attract substantial foreign investment, and its local capital markets have enormous growth potential. Investors agree that apart from the growth potential, India’s political, executive and legal system makes it a very attractive destination. On this count it does even better than most emerging economies.
On the other hand, India is no different from other successful economies, whether developed or developing, and cannot escape the challenges. The government has identified infrastructure development as a key priority in its five-year plans. In fact, the only factor that could impinge on India's rapid economy is infrastructure constraints.
According to government estimates, there is need for investment in infrastructure to rise from 4.6 per cent to 8 per cent of GDP in the 11th Plan period to maintain the targeted growth of 9 per cent.
Though India is one of the least vulnerable economies, it is not immune to any sharp global economic downturn. But, India holds itself in complete readiness to face any challenges that might arise.
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