ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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India's Growth Story

EPW has published an interesting article by R Nagaraj (“India’s Dream Run, 2003-08”, 18 May 2013) and a very incisive editorial (“The Faltering Economy”, 15 June 2013). It needs to be noted that empirical/statistical research has to tell the long story on growth; short stories may lead to missing the woods for the trees. The long story was told in the pages of EPW by Dongre and Hatekar (“Structural Breaks in India’s Growth”, 2 April 2005). The oft-repeated proposition of a sluggish “Hindu Rate of Growth” having a structural break in the 1980s was rebutted and it was shown that the period of 1950 to 1980, later much despised by the reformers, was one with the statistically significant break from the previous 50-year period of the 20th century.

As Nagaraj rightly points out, protagonists of policy paralysis (who often blame it on the pressures of a democratic polity) are wrong in their short-term diagnosis too. In fact, the Indian growth story is one of five to six year cyclical ups and downs since the 1990s and this is indeed indicative of the limitations in the drivers of growth in pushing a sustained rate. The narrow base of the levers of growth could be one main reason for this.

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