The year 2006 , the Indian juggernaut was unstoppable riding a wave of optimism and promise. We had just completed one more year growing at 9% yoy, the fastest rate at which the country had grown. IT was the new posterboy of the India shining story but the other sectors were not to be left behind, manufacturing was growing at 15-20% yoy generating a lot of wealth and employment. The usual punching bag factor of the country "population" suddenly started to look like a boon with ever other country poised to get older by 2030. The government was well placed to bring in market,education and labour reforms to back up the stellar performance of the economy.
Fast forward to 2013, the whole scenario is gloomy with the economy growing at 3.5%. What went wrong, where did we miss the bus ? Was this a temporary blip or was the engine humming to a standstill. The government riding on the wave of growth and optimism failed to act on key levers to bring in investment, namely retail. It messed up big time on the infrastructure front with traffic jams the order of the day in all major cities. It did not touch the labour laws for want of electoral vision and filled the economy with welfare schemes. Ease of doing business has gone down the wrong path with major Indian companies investing abroad due to the red tapism.
India needs a comprehensive manufacturing and industry policy, labour laws have to be eased, infrastructure to be made world-class. Finally a lot of the welfare schemes need to be dropped to address the CAD issue.
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