Growth is a word that is ambient to the hearts of numerous
policymakers in the Capital, peculiarly the North Block mandarins.
For, it is the advanced economic growth and strong macro-economic
basics that would aid hold foreign investor interest in the Indian
economic system, particularly when global economic situation is not
all that bang-up. But the Central Statistics Office's advance
estimation of five per cent GDP development for 2012-13 came as a
surprise not just to the markets, but also to the Finance
Ministry.
Subsequently a long time, the CSO and the Finance Ministry were
not on the same leaf. The explanation is not far to perceive. At a
time when the Finance Ministry is incisive to promote more capital
inflows, a five per cent GDP growing is liable to conquer the
investment sentiment.
The Finance Ministry readily went on a harm control exercise and
wanted to punch some holes in the CSO projections � that it
is founded on past data and does not element in the signs of upturn
seen in the economy since November last year. For his part, Chief
Statistician of India T.C.A. Anant, whose Ministry is in pleading
of the CSO, stuck to the five per cent prevision, stating that it
was based on the methodology appointed by the National Account
Estimates. Past data can always have a supporting on the prevision,
especially if there is an alteration in trend. But we cannot do all
things about the methodology, Anant has reportedly said.
But the arguable point is a five per cent GDP development or even
5.5 per cent GDP growth is far below possible for a country such as
India. This is something that is well accepted even in the
corridors of power and jointed by Chief Economic Advisor Raghuram
Rajan. So what should India do to bring to maturation and sustain
foreign investor curiosity in this market?
One thing it can do is to withdraw its ambivalence towards foreign
direct investment (FDI). MIT Sloan Management School's Dean ,
S. P. Kothari, who was in Delhi a few days earlier for a
conference, had an idea that the policymakers would do well to
go.
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