India’s Declining Growth

We all are well aware of the economic crisis that India is going through presently.  The slowdown of the economy is not short term.  It will naturally take a large amount of time for everything to get back to normal. With the failure of the finance led growth model, India needs to make investment for its future.  India will require at least one complete generation to get back to normal and be able to build human capital in the more productive urban spaces. India’s gross domestic product (GDP) growth has come down drastically from 8% a year last year to 5% in the second quarter in the present year. The International Monetary Fund (IMF) has speculated that the Indian economy will be at 7.5% a year by 2021. Indeed such optimism may prove highly dangerous for India. It is expected that the GDP growth may fall and drag in the 3-to-5% a year range. The ongoing slowdown is not a short-term disruption. The financial bubble that began inflating almost three decades before is finally fizzling out. Indian policymakers and economists have felt very confident in the past years that saw growth.  They have presently started realizing on a narrow vision of economic liberalization. This can definitely do little to cause long-term growth but which definitely creates intentional financial inequalities. India has indeed lacked creation of human capital and urban infrastructure. These were indeed needed for a modern and up to date economy. In the absence of these basics, India is suffering and is going through a lot of disadvantages. It is devoid of a growth model.