In May 2013, India was counted as one of the ‘Fragile 5’ nations. Today, just 20 months later we are numbered within the best emerging economies. In fact, Prof. Nouriel Roubini of Stern School of Business (NYU) who foretold the global financial crisis, now predicts that the Indian tortoise will overtake the Chinese hare over the next decade. The reasons for this impressively quick turnaround can be attributed to a smart government clearly intent on moving away from ‘tax terrorism’ and proactive about business reforms, as well as the positive impact of reduction in global oil prices, which can help rein in inflation and our looming fiscal deficit
The country might overtake China over the longer term, but this can only happen in an India where factors that currently inhibit accelerated growth are addressed and policy decision- makers stop shooting self-goals.
India is definitely not out of the woods yet. Indian corporates are still very debt-laden, and not overly eager to make new investments until their balance sheets look better. Interest costs are high. A sizeable number of large projects are either awaiting government approvals or not producing cash flows – and until that happens, new investments will certainly not kick-start.
For India’s economic and demographic dividend to pay off optimally, the country’s youth must enter the job market with employment-ready skills. The government needs to usher in more pro-growth reforms – especially on the labour, energy and taxation fronts, and that too at a faster pace. Also, partisan and right-wing politics must stop hijacking the growth agenda.
In its quest to unearth corruption, the Indian judiciary is actually compromising India’s prospects for growth. Even positive actions are now placed under the microscope. Such a strangle-held environment cannot promote growth, because the government cannot follow through on a reforms-driven vision. A back-ward-looking witch-hunt can never advance forward-looking growth.
As an Indian, I am very much invested in my country’s future – and I am certain that, with just a few decisive tweaks, we will definitely live up to Prof. Roubini’s prediction.