Everybody talked about the huge growth potential of the Indian economy. The Indian economy, too, performed as per expectations during the middle of the previous decade. The Gross Domestic Product (GDP) growth rate was close to touching the double-digit figure during the boom days prior to 2008. Considering the under-investment in the Indian economy, huge domestic market size and several untapped growth opportunities, economists were expecting this great run up to continue for the ensuing several years. Alas, this remained just an expectation. Even worse, the Indian policy makers do not expect to achieve that kind of growth. Therefore, there is no clear cut roadmap charted by them as to how the Indian economy would perform to its real potential. At least, not in the recent Budget for the coming financial year 2012-13 (FY13).
Have a look at the following numbers. The Indian economy grew by 6.1% during the third quarter of the current fiscal FY12. The Indian government expects 6.9% growth for FY12. It is well below the projected growth rate at the start of the financial year FY12. And, the government has given a roadmap for 7.6% growth rate for FY13 in its recent Budget presentation. First, the target is not very encouraging. Then, the Budget presented does not have much in it to give enough confidence that we would be able to achieve even that target.
And these are not just the numbers. The slowdown is so glaring on the ground as well. Several infrastructure projects are hanging in doldrums. Many are yet to take off. Workers migrated to cities to earn their living by working on construction sites are returning back to farmlands. This alone says the pathetic situation of the infrastructure growth. Slower government approvals, environmental hurdles, policy paralysis and higher interest rates have taken their toll on the infrastructure growth, something India needs badly. As without growth in infrastructure, it is impossible to grow the economy at healthy rates.
True, everything has not come to a standstill. Some of the sectors are doing okay. The economy is progressing at around 7% rate. But the question remains is it enough? The bigger question is, does our economy deserve this kind of growth? Certainly not!
What the Indian economy needs is some bold leadership at the top level. A genuine interest to bring growth on track. Currently, it seems to be that the policy makers are adjusting themselves with the lower growth rates. A definite bad sign for the future of the Indian economy. And raising enough doubts whether we would be able to see healthy growth again.