What is India's real growth potential?

In 2004, before India’s growth surge towards Chinese levels became evident, Dani Rodrik of Harvard University and I wrote in the Economic and Political Weekly that India’s potential growth was “at least 7 per cent”. The outcome over the next few years was a pleasant surprise, but also a mild rebuke of our analysis. Not only did actual growth surpass our projection, it was achieved much sooner than our “medium-term” horizon — which was evasive econo-speak for “not immediately, but sometime in the future”.

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