What 2014 won't change
- India's future cannot exist without the future of Kashmir: Rajnath Singh
- Will appoint nodal officer to help Kashmiri youth across the country: Rajnath Singh in Srinagar
- Dec 16 Delhi gangrape case: Convict attempts suicide inside Tihar Jail, rushed to hospital
- Earthquake in Italy kills 247, toll may rise as rescuers continue hunt for survivors
- Rahul Gandhi twisting statement, must show generosity, apologise: RSS
There are no more stroke-of-the-pen economic reforms, no shortcuts
That a change in government in 2014 will bring back the higher rate of GDP growth that we experienced a few years ago is an increasingly popular view. While there may be an upturn in exports, due to the recent depreciation of the rupee and the pick up in the US economy, and some improvement in domestic investment, sustaining a high rate of growth requires longer-term solutions. These solutions are not difficult, but could take some time to put in place. In the meanwhile, GDP growth may still pick up a little in 2014-15. There are two components of the slowdown: the trend growth rate and business cycle conditions. While the business cycle conditions may improve in the coming months, the trend growth rate remains a problem.
Has India's trend growth rate slowed down? Long-term trend growth rates of economies, such as a 30-year average growth rate, have been one of the least understood and most unpredictable variables in the field of economics. The accumulation of capital, human capital, institutions, rule of law, infrastructure, political systems, and productivity growth change in ways little understood by economists even today. Their impact on long-term growth remains even less understood.
Scandals in the allocation of spectrum, coal blocks and land, and projects that have been stalled due to environmental clearances have certainly worsened the medium-term growth rate. But if these factors affect the long-term trend it implies that India does not have the institutions it needs to solve these problems. Despite all the gloom and doom, this is a view that is hard to find. One of the characteristics of Indian democracy is that even though it takes time to build the state's capacity, which is one of the biggest challenges that needs to be surmounted in order to deal with the issues of the day, it is not impossible to do so.
- Sedition law cannot be used against honest views, expressed peacefully
- India’s dependence on China for medicine ingredients is a matter of concern
- Before Balochistan, India has supported some human rights causes and ignored others
- Olympics brought many smiles — and a little bit of rancour
- Harish Gupta case involves questions about the very nature of governmental decision-making
- Tension between the executive and judiciary could play out in creative, or destructive, ways