Abstract
Despite natural calamities, international oil price hike, regular elections and a huge fiscal deficit, the average annual growth rate of India is comfortably inching towards the orbit of '7 to 8 %', inflation is benign, foreign capital is swelling, interest rates are falling, banks are getting healthier and more importantly social sector is improving steadily, albeit slowly. Its success story is mainly endogenous and is steered by active policy measures taken by policymakers of exceptional acumen. There is nothing 'puzzling' or 'paradoxical' or 'mythical' about them. There is no iota of 'complacency' displayed by them about a 'short-lived' 'precursor-to-crisis' type of success story as alleged by some. The 'slow' progress is a conscious policy option in line with India-centric structural constraints to achieve lasting solutions for recalcitrant problems. India's 'sustainable growth' strategy bases itself on measures that can facilitate growth acceleration while reducing the incidence of poverty. On a theoretical plane it looks like having the symptoms of an 'under-investing' state, namely, on infrastructure, health, education and women empowerment. The usual policy responses could be to increase investment in these areas even if it increases fiscal deficits further. The best way to accomplish it is to embark upon a massive agricultural/rural development program centered on (rural) infrastructure projects so as to make the poor benefit directly. Policy options to help poor households take advantage of nonagricultural and urban employment opportunities need to be emphasized. The other response is to identify areas of spending eligible for the chopping axe. Improvement in quality of governance, the other area of thrust, will be the icing on the cake. China and India do not reveal symmetrically comparable case history. Nonetheless, India, given its potential and current performance records bears the prospects for leaving China behind. A rational outlook would warrant India to comprehend beyond 'what China is doing' and to strive to catch up with developed economies, may be with 'Asia' as a partner in its voyage for the wider growth and development trajectory.
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