Column : Neither America nor Anna ...
Such pessimism may look justified, given that the external sector has been one of the major areas where India has registered outstanding success, with buoyant growth of trade in goods and services and larger investments adding to overall growth in demand and output. But such an approach ignores the substantial potential of the domestic economy where there is still a sizeable leeway for boosting productivity and accelerating growth.
This has been pointed out by many studies, including that by the McKinsey Global Institute, which showed a decade ago (in 2001) that India could step up GDP growth to 10% if it can nibble away at the three major barriers to growth, namely the multiplicity of regulations that govern prices and output in product markets, the distortions in the land markets, and the government ownership of business.
The McKinsey study had, in fact, even estimated that these three barriers together pull down GDP growth by as much as 4%,
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