is the title of a piece by Swami Aiyar, here in ET today.
For more than two decades, from 1980 to 2003, India’s GDP growth averaged around 6% per year. Reforms in 1990 produced no dramatic acceleration. Then, with no new policy impetus at all, GDP growth suddenly shot up after 2003 to average 8.6% in the next four years. How and why?
He looks at 4 theories doing the rounds:
- Tipping point
- Steady improvement followed by exogenous shocks
- Manufacturing catching up
- Global boom
The one question that I have is that role of the parallel economy - unaccounted money. I think there is a strong role of the parallel economy to play in this whole thing - I am also not sure that the effect is entirely positive and good for the country. Real estate in many parts of the country still operates on a large black component. Hawala, terror funds all find their way in a boom period.
But one thing is for sure. As long as the boom lasts (and I am not saying just the stockmarket), this is the time for India. Its now or never.