Column: Betting on India
At my university, I help run a new initiative that focuses on finance, and we just hosted a visiting speaker, a prominent statistician known for some innovative algorithms for analysing data. He is also apparently a lifelong—and successful—bettor on horse racing.
He was asking me about India’s economic prospects and, in formulating my answer, it struck me that the metaphor from his passion is apt: it is time to bet on India.
Why do I now think so? For the past few months, I have been gloomy about India’s policy paralysis and missteps. Indeed, many of the core problems are still there. But there is evidence that India has turned the corner. The place to begin is with the Economic Survey of India. (By the way, our visitor to UC Santa Cruz has been a long time colleague of India’s present Chief Economic Advisor). The first two chapters of the Survey lay out India’s current situation and long term growth prospects with unprecedented clarity. The quality of the overall analysis itself is cause for optimism. If this analysis truly begins to guide policy, India will be getting on the right track.
The Economic Survey predicts growth of 6.1-6.7% in the coming fiscal year. This is conditional on a decent monsoon, moderating inflation and reasonable global growth. Barring problems on these fronts, the prediction seems a reasonable one. Even a moderate improvement in growth can make
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