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MS Installed

That’s how many felt in the summer of 2004 when the famed architect of economic reforms was anointed India’s prime minister. For the first time, a technocrat with humongous experience as a bureaucrat was assuming that office. Many believed that this would be a game changer. 10 years on, there is a whipped up mood of pessimism, with the nation crying for change. Was it all that bad? Let’s look at some bald numbers.

MS Installed

GDP GROWTH

The GDP reflects the wealth created in a country in a particular year. Three sectors drive this growth: agriculture, manufacturing and services. Once upon a time we grew at 2-3 per cent, which came to be dismissed as the Hindu rate of growth. Given the fact that our population was growing at 2 per cent it meant that any economic growth was punctured by our population growth. Things started changing with the onset of economic reforms in 1991.  Once we stabilized in the 8 per cent zone we started moving up. From growing at 8.5 per cent in 1999 we hit peaks in 2007 and in 2010 but have now slipped down very significantly. Worse still, the growth rates are currently below the 5-year moving average.  The good news is that from here it can only go upwards!  The funny part is that when the economy does well the credit goes to industry and when it does poorly the debit goes to the national government. India’s 10 years’ average GDP growth is 7.6 per cent per annum while China’s is 10.3 per cent. With China growing faster than India, and for more extended number of years, we are under the threat of being left far behind.

    We think it’s a 3/5 in terms of performance on the GDP front.

 

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