Without reforms, India’s growth script lacks global appeal

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SummaryThe latest forecast by the IMF has put India’s GDP to grow by 4.9% in 2012 and 6% in 2013 against a global growth of 3.3% and 3.6%.

The latest forecast by the IMF has put India’s GDP to grow by 4.9% in 2012 and 6% in 2013 against a global growth of 3.3% and 3.6%. Based on the economy's behaviour in Q1 and Q2 of FY13 at 5.5 and 5.3%, it seems the Indian economy would grow at around 5.5-6.0% for the full year of 2012-13 and is likely to grow at 6.5-7% in 2013-14.

Thus current economic growth in the country amid worldwide slowdown is only next to China and much above the growth paradigms seen by other members of the BRIC club.

Despite this, India’s growth story does not find much of a place in the deliberations and reports on the global perspective.

The latest example is Platt’s report on outlook of steel industry where none of the experts have mentioned about the prospect of the steel industry in India, which has been projected to grow at one of the highest rates in 2013.

One plausible explanation could be the low share of the Indian economy in terms of global wealth, share in specific commodities, including agriculture (except milk), and the marginal performance in trade.

India stands high in population numbers and as large importers of crude oil, gold and coking coal.

A trend is also visible that some specific areas of the economy are providing space for utilisation of the excess capacities of advanced countries.

This has hit hard a few critical sectors such as machinery and equipment, all belonging to the manufacturing sector, which has grown by a meagre 1% during April-November 2012.

A second reason relates to the lack of trust by many analysts in the ability of the Indian economy to sustain the growth perspective in the coming years.

The hesitancy in introducing the much-needed reforms, the inter-ministerial conflicts in resolving issues and the compulsions of coalition polity may have brought in some amount of doubts in India’s progress chart.

A recent analysis on the world in 2050 by PwC has, however, nullified these apprehensions.

India’s GDP at Purchasing Power Parity (PPP), which is a better indicator of average living

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