Arrey brother, why bother? The economy’s doing too well to make attempting radical change worthwhile
Indian economy looked so good to global analysts. Yet, complaints galore have followed the budget presentation. Why has it not combated weak consumption? Or weak private sector investment? Or weak employment?
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These complaints miss the larger picture. India is doing too well for politicians to seek major changes. Radical changes are unavoidable for a bankrupt country, as India was in 1991. But not for a country averaging 6.5-7.0% GDP 'miracle' growth for two decades, through serious crises like the Great Recession and Covid. This has drawn praise from global quarters. So, why attempt big reforms that necessarily carry risks, as BJP found when attempting reforms in land acquisition and farming?
No matter how weak one may view consumption, private investment or employment today, they have not constrained long-term 'miracle' growth. All three parameters go up and down, but are overall in sync with it.
With radical reforms, India could touch 12% growth, as China once did. But no democracy has ever exceeded 7% growth for long periods. Democracies dislike radical reforms that may hurt many in the short term, even if beneficial in the long run.
Fragmentation of the world economy, rise of regional military conflicts and climate change mean IMF and other global institutions anticipate a global slowing. That will make even 7% growth difficult. Aiming for
