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India needs to jump out before it boils

The GDP growth rate for the past five quarters is 8.5, 7.7, 6.9, 6.1 and 5.3. This steady downtrend of lower quarterly GDP growth is a reminder of the frog-in-boiling water syndrome. It is time to jump out, lest we permanently move into a lower orbit. India's sustainable long term GDP growth was supposed to be around 9% as per Planning Commission estimates. That number, also called non-inflationary potential growth has now been estimated at around 7.5%. Anything higher than 7.5 is now considered inflationary in the medium to long run, because the country has not built up sufficient productive capacity. 

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