India’s economy is now riding a roller-coaster
5 years, 4 months ago

India’s economy is now riding a roller-coaster

Deccan Chronicle  

Even the political surgical strike “integrating” Kashmir failed to divert attention from the woes of investors, employees and entrepreneurs — all of whom are stuck with a similar malady: poor returns. Assume that all three reforms happen, and agricultural growth increases from three per cent per year to a high of six per cent per year. Second, nominal GDP growth will probably not exceed 9.5 per cent — six per cent real plus 3.5 per cent inflation — as against the budgeted 11.5 per cent. Limiting the revenue deficit to two per cent of GDP despite the reduced tax receipts and reallocating the cash flow towards quick turnaround infrastructure spends for boosting agriculture and reducing the transaction costs for exports serves multiple objectives. Raising the investment to GDP ratio to 35 per cent — a proxy metric for growth — is crucially dependent on increasing household savings from 17 per cent in FY2018 back to the noughties level of 23 per cent of GDP.

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