India marches ahead
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
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
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.
Projectmonitor, which has been tracking India’s growth story, enters its 8th
year of publication which was made possible only by your unflinching support. We
take this opportunity to express our gratitude to all our readers and
advertisers, and look to your sustained support—as India marches ahead.
[May 19-25, 2008]