Is 8-9% GDP growth a feasible target for India? The answer lies in the country’s ability to push through judicial and bureaucratic reforms, according to former Chief Economic Adviser (CEA) Arvind Subramanian.
In a recent interaction, Subramanian emphasized that India has the capacity to achieve a high growth rate, but the key to unlocking this potential lies in streamlining the country’s governance structure.
India’s Growth Story So Far
India’s growth story over the past few decades has been nothing short of remarkable. From a struggling economy in the 1990s to a rapidly growing nation today, India has made tremendous progress. The country’s growth rate has accelerated significantly, driven by factors such as a large and young population, a growing middle class, and a favorable business environment.
According to Subramanian, India’s growth rate has averaged around 7% over the past few years, which is a testament to the country’s economic resilience. However, he believes that the country can do better, with a growth rate of 8-9% being a realistic target.
Bureaucratic Reforms: The Key to Unlocking India’s Growth Potential
So, what’s holding India back from achieving its full growth potential? According to Subramanian, the answer lies in the country’s bureaucratic structure. He believes that India’s governance system is still plagued by inefficiencies, corruption, and a lack of transparency, which are major obstacles to growth.
Subramanian emphasized the need for judicial reforms to improve the country’s dispute resolution mechanisms. He also highlighted the importance of reducing the time and cost associated with starting a business in India. According to the World Bank, it takes an average of 22 days and costs around 6% of the country’s GDP to start a business in India, which is one of the highest in the world.
Furthermore, Subramanian stressed the need for a more efficient and effective tax administration system. He believes that India’s tax system is still marred by complexities and a lack of transparency, which are major deterrents to investment and growth.
What’s Next for India’s Growth Story?
So, what’s next for India’s growth story? According to Subramanian, the government needs to take bold and decisive action to push through judicial and bureaucratic reforms. He believes that this will not only unlock India’s growth potential but also improve the country’s business environment and make it more attractive to investors.
While there are challenges ahead, India’s growth story is far from over. With the right policies and reforms in place, the country can continue to grow and flourish, creating new opportunities for its citizens and cementing its position as a major economic power in the world.
As India looks to the future, it’s clear that the country has the capacity to achieve a high growth rate, but it needs to push through the necessary reforms to unlock its full potential. The question is, will the government take bold action to drive growth and improve the business environment?