Nine To Nine

Why getting back to record levels of economic growth hit a decade ago will be no walk in the park.

- Samar Srivastava

IF YOU’VE BEEN A DILIGENT reader of business newspapers, spent time watching business anchors on television and ardently followed policy pronouncements by the government, chances are you’d fall in the camp that believes a spurt in India’s growth is just a matter of time.

After all, the popular narrative (and consensus) has been to suggest that once the significant structural reforms initiated by the government begin to bear fruit, India would be in for rich pickings. In short: India is within sniffing distance of touching a rate of growth that exceeds 9 percent. The hope is that this time the rapid growth would rest on a firmer footing rather than a boom and bust cycle.

It was between 2005 and 2007 that India had three years of 9 percent growth. A decade after that growth spurt ended with the 2008 financial crisis is a good time to ask whether the Indian economy is primed for a higher growth trajectory. Forbes India spoke to a cross-section of economists and people in industry to check if they’re as bullish about India’s prospects as the popular view. What emerged is that even while they agree that growth potential has moved up to 7-7.5 percent, they are cautious about the economy’s chances to exceed that in a meaningful manner. “A lot of impediments to growth have been removed but the political consensus required to get us to our growth potential doesn’t exist,” says RC Bhargava, chairman of Maruti Suzuki. “I believe that in the political battle that is going on we will certainly lose out on some growth,” he adds.

The consensus pretty much is that India’s prospects remain tied to the global economy and that the country is vulnerable to external shocks such as higher oil prices.