Narendra Modi will have to create avenues for investment in large-scale manufacturing

Dec 12 2013, 13:47 IST
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SummaryArvind Panagariya has been one of the strongest votaries of the Gujarat model of development

there was a favourable effect of it, we should have seen it in that state. The implementation of the Food Security Act also began early in Rajasthan, when it still had the status of an Ordinance. Again, it did not translate into seats for the Congress.

Coming back to the Centre, how do you see the GDP growth from here as this would be one of the important benchmarks to judge this government and also the next government thereafter?

I really didnít expect the growth to decline as far down as 4.4% as it did in the first quarter of FY14. The second quarter has been slightly better with 4.8% growth. I think we should see continued upward movement going forward. The fundamentals of the economy are sound with the investment holding up at 30% of the GDP. The depreciation of the rupee should also help exports. So, for the entire year, the growth might come close to 5%.

And from there, the prospects look goodÖ

From there, it would be the function of what the next government does. My sense is that if the new government comes and assures the bureaucracy in no uncertain terms that the government is going to take responsibility for all the decisions and not pass the buck to it and also puts in place an environment minister who works in the national interest, we could rapidly return to 7-8% growth. I surely donít rule out the possibility of returning to 7% in FY15.

What do you expect from Modi if he becomes the Prime Minister?

Governance-wise, he certainly is a decisive leader. This observation is based on what we have seen in Gujarat. What he does at the Centre remains to be seen.

But in terms of economic policies, it is not very clear what the BJP wants to do and even Modi has not yet outlined what his views are?

Here, I draw a distinction between the national leadership of the BJP and Modi. The national leadership seems to have been behind the curve. For Modi, it is still early in the campaign. But as the campaign progresses, I would expect him to clarify where he would take the country if elected to the highest office.

What would you expect Modi and his government to do?

The very first thing obviously would be to reassure the bureaucracy and end the paralysis. He would also need to streamline the environmental clearances as they have

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