Can India attain an over 8% growth rate again? In our previous article, we have had two open questions. The first was about the slowing pace of the Indian economy. Backed by data, we put forth that the prime phase of near 9% economic growth, witnessed between 2003 and 2008, is unlikely to be repeated anytime soon.
Today’s piece addresses the second and an important question — why is it that that prime phase can’t be repeated?
Meanwhile, most economists also appear to be divided by the camp they belong to or the regime they support. However, getting lost in either of the narratives is missing the big picture.
We all support India’s cause to grow fastest in the world and reach a middle-income nation status. But the task, as we shall see, is much more difficult vis-à-vis the narratives or the rhetoric.
OECD nations as economic leaders: 1960-1985
The analysis has to begin from the 1960s and see how the leading rich economies started to take an early lead. After World War-II, a period of sustained peace arrived, and investments started in infrastructure and industries. Most importantly, people began consuming and spending with more stability around the future of life. The generation is called baby boomers for a reason!
The following two decades saw an average of near 5.25% growth in the world’s GDP. In absolute terms the global economy grew from USD1.5 trillion to USD5 trillion by 1973, and USD10 trillion by 1979.
The per-capita growth almost averaged 12% per year between 1971 and 1980. While the world averaged at ~USD2,500 per capita in 1980, most OECD (Organisation for Economic Co-operation and Development) nations were approaching middle-income levels of USD10,000 per person.
Read More at https://economictimes.indiatimes.com/prime/money-and-markets/slow-growth-is-weighing-on-world-gdp-can-india-defy-global-headwinds-to-be-the-next-superpower/primearticleshow/99938655.cms
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