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Straight from the Specialists

How to get India on the highway to high growth

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(Any opinions expressed here are those of the author and not of Thomson Reuters)

The president’s address to parliament this week lays out the new government’s roadmap to get India’s economy back to high growth. That will take time and is not easy either.

True, the BJP government led by Narendra Modi inherited a weak economy – growth was a mere 4.7 percent; industry was static; there was no employment generation; and inflation was at over 8 percent. The only comfort was that foreign exchange reserves exceeded $312 billion.

New concerns have also emerged. The India Meteorological Department has confirmed that this year’s monsoon will be 93 percent of the long-term average and will hit production of rice and horticulture, particularly in the south and the north-east. This will raise food inflation further, reduce exports of agricultural commodities as well as part of the demand for industrial goods, and delay an upswing in the investment cycle. It will, therefore, take a little longer to get the economy back on the rails.

The roadmap, however, is clear. The government has identified five complementary ways to create an environment that will foster growth.

The primacy of good governance for Modi

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(Any opinions expressed here are those of the author and not of Thomson Reuters)

At his second cabinet meeting, Prime Minister Narendra Modi unveiled a 10-point programme that set out a comprehensive agenda for his ministers. The agenda is a good cocktail of short-term needs and long-term objectives.

The underlying message, however, is of good governance. That is what Modi has been harping on during his election campaign and which he sincerely believes is the secret of his success in Gujarat.

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