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Indian Economy - The growth story
The country's economy is transitioning to a phase of consolidation. After India witnessed the first wave of economic reforms under the PV Narasimha Rao Government in 1991, and then followed by Finance Minister, Dr Manmohan Singh, during his two terms as Prime Minister, between 2004-2014, we are witness to another exciting phase of reforms under the Narendra Modi-led NDA Government.

Never ever in the past has the Indian economy been so keenly watched by global community with hope, expectation and anticipation. The sheer size of the economy and the potential it holds, has global investors, multi-national corporations, and players in different sectors, attracting them to take part in the country's economic progress and the growth agenda.

The recent "Make in India" call by Prime Minister Narendra Modi seems to have galvanised fresh interest in the country, be it in the areas of hitherto extremely protected defence, aerospace and the sunrise renewable energy sector.

A number of investors, who are faced with stagnation in several economies and negative growth in many others, are maintaining a hawkish view of the country's economic progress, just waiting to pounce on any opportunity that unfolds.

For a large economy projected to become third or fourth largest by 2050, investing community sense a huge opportunity. But the economic growth, which was close to double digit growth around 2004, when Prime Minister Atal Bihari Vajpayee handed over the reins to Dr Manmohan Singh, has slipped to blow 5 per cent, belying hopes. While even a 5 per cent growth is great in a depressed global economy, where some are finding it hard to achive one or two per cent growth.

So much for the potential in the country, sector experts feel that the man (Dr Manmohan Singh as Finance Minister under PV Narasimha Rao), who was credited to have played a crucial role in the economic reforms (1991-1995), was being targeted for policy paralysis.

About nine months rule of the present government has had mixed expectations, some positive and many others negative. As the Union Finance Minster Arun Jaitley presents his first full Budget on February 28, there is hope that this could be a turning point in the country's economic history.

The recent upward revision of the GDP data by the CSO has come in for mixed reactions.

In such backdrop, Yerram Raju, Economist and Former Dean of Studies, Administrative Staff College of India, top banking experts, M. Sitarama Murthy, former Managing Director of State Bank of Mysore, and Subbaiah Singala, banking expert, have brought out an extremely timely masterpiece, "India's Growth Resurgence, Sectoral Issues and Governance Risks", which provides insights into the current situation and likely way forward.

Published by BS Publications, the book traces the problems and prospect of the economy and how various sectors could play a role in the economic progress of the country.

Dr Duvvuri Subba Rao, former Governor of Reserve Bank of India, in his comments on the book says, "as the new government grapples with the complex and compelling challenges of structural and governance reforms, there is a vigorous, and often confusing, debate in the public space on what the Government should do. Even educated people are quite bewildered."

The book responds to that need by giving a comprehensive overview of the agenda for reforms across sectors and the risks the government must manage in pursuing this agenda.

Authors, who draw upon experience from diverse exposures both academic and general, make this book stand out identifying problems, risks and challenges providing new insights to the country's developmental agenda.

They seek to provide how, there is extreme diversity in opportunities and challenges. While the IMF World Outlook 2014 projects India's growth to be 6.5 per cent in 2015, just behind China with 6.8 per cent, the authors sight a twist to this growth story, with over 300 million people living below the poverty line in the country. According to them, bringing about the inclusive growth is seen to be one of the major tasks ahead.

Raju, who has thus far written 14 books on varied subjects in Economy, and his co-authors seek to present the economy story through the prism of sectoral analysis within the realm of common understanding of the economy. They spent couple of years codifying their collective experience as practicing economists. They spot islands of growth excellence and neglect or lack of adequate focus on few others.

The human development indicators expose the ground realities. The seemly strong growth does not translate into major changes in terms of some of the indicators such as poverty, literacy, public health and sanitation among others.

There is nothing like a de-coupled economy as some advocate. Impact on one major economy, could have a cascading impact on various other economies, stock markets and banking, directly and indirectly. The collapse of the Lehman Brothers last decade, and the time taken for the world's largest economy-the US, to shrug it off, provides great learning. Therefore, the risk associated with growth cannot be wished away as we embrace globalisation and assimilate external interest in India.

The contribution of MSMEs to the economy is huge but they are a neglected lot. The globalisation brings with it some inherent problems for local MSMEs. Either they brace up for the challenge or perish. The deep-pocketed global investor, with capability to play a long-term waiting game, could bring about a major impact on these unsung heroes (MSMEs) of the country's economy, which could either get stronger or perish unable to take on competition.

Therefore, the Government needs to carefully address the challenges of an inclusive growth touching upon these enterprises and their interests in the wake of global competition, strengthen the services sector and bolster the contribution of agriculture sector, the real mainstay of the economy.

Highlighting the importance of financial inclusion, strengthening Jan Dhan programme, which seeks to bring about inclusion, and ensuring credit flow to these MSMEs and improving the manufacturing capability, the authors call for a holistic development as a policy mantra.

They sum up with the need to accelerate the growth of the economy with the Centre taking States on board the business and fiscal reforms while implementing major initiatives like Good and Services Tax, as these could determine the pace of reform agenda and overall growth of the economy.

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