The Economist article “India’s economy: A chance to fly” highlights the country’s economic potential among a group of slowing emerging markets. It emphasizes the large population’s “entrepreneurial spirit” and low income as area of promise instead of concern, and stresses the need for bold structural reforms to tap into that potential. Land usage, power/energy regulation, and labor laws all should be overhauled to make way for larger participation in the global service and industry markets. These reforms will be tough on India, but “the danger is that, with inflation falling and India enjoying a boost from cheaper energy, the country’s leaders duck the tough reforms needed for lasting success. That would be a huge mistake. Mr Modi and Mr Jaitley have a rare chance to turbocharge an Indian take-off. They must not waste it.”
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India’s Economy
A Chance to Fly
India has a rare opportunity to become the world’s most dynamic big economy
EMERGING markets used to be a beacon of hope in the world economy, but now they are more often a source of gloom. China’s economy is slowing. Brazil is mired in stagflation. Russia is in recession, battered by Western sanctions and the slump in the oil price; South Africa is plagued by inefficiency and corruption. Amid the disappointment one big emerging market stands out: India.
If India could only take wing it would become the global economy’s high-flyer—but to do so it must shed the legacy of counter-productive policy. That task falls to Arun Jaitley, the finance minister, who on February 28th will present the first full budget of a government elected with a mandate to slash red tape and boost growth. In July 1991 a landmark budget opened the economy to trade, foreign capital and competition. India today needs something equally momentous.
(to continue reading, see India’s Economy: A chance to fly)
(From print edition:Leaders)