Economics: Is it time for India’s miracle?
India seems to be following the path that led to the East Asian Miracle
India’s demographics, macro fundamentals and industrial policies mirror those of the nine countries that experienced rapid economic growth in the East Asian Miracle. Plus, it’s gaining attention as a potential alternative to China in the New Cold War.
But its policy implementation looks less miraculous
India is not taking full advantage of its demographic dividend and may be backsliding on human capital development. Its fiscal deficit may be crowding out private investment. And its industrial policies don’t seem well-designed.
India is getting enough right to deliver rapid growth, but not a miracle
We think India should be able to grow about 4-5% annually through 2030, slightly slower than its recent pace. It may already be the largest contributor to global growth, but its impact will probably never compare to China’s during its high-growth stage.