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There's a way to escape the economic rut. The current slowdown in the Indian economy, which comes after a period of strong growth, has all the ingredients of a "middle-income trap." Land and labour reforms, higher investments in manufacturing, and a greater focus on human capital are required to escape the rut.

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  • Most fast growing major economies of the previous century such as Brazil, Mexico and Turkey exhausted their growth potential for lack of a structural shift in their growth model. Thus they fell into the middle income trap.

    India today is facing something similar. Growth has slowed down, surprising

    Most fast growing major economies of the previous century such as Brazil, Mexico and Turkey exhausted their growth potential for lack of a structural shift in their growth model. Thus they fell into the middle income trap.

    India today is facing something similar. Growth has slowed down, surprising many. Experts say this is a structural slowdown and India's economy needs bold reforms to revive growth back to 7-8 percent in order to avoid the middle income trap.

  • Jumping from Agriculture based to Service focused economy was driven by factors like familiarity of using English and comparatively robust education system. Since then very limited structural reform has taken place to replicate this across sectors. Till we invest in human capital, modernise agricultural

    Jumping from Agriculture based to Service focused economy was driven by factors like familiarity of using English and comparatively robust education system. Since then very limited structural reform has taken place to replicate this across sectors. Till we invest in human capital, modernise agricultural sector and build manufacturing mass upliftment will never happen.

  • For much of the period after liberalisation, the Indian economy was fuelled by the phenomenon of "jobless growth." Services, not manufacturing or agriculture, contributed to the runaway growth.

    The chinks in this economic model have now become conspicuous. Due to stark income inequalities, unemployment

    For much of the period after liberalisation, the Indian economy was fuelled by the phenomenon of "jobless growth." Services, not manufacturing or agriculture, contributed to the runaway growth.

    The chinks in this economic model have now become conspicuous. Due to stark income inequalities, unemployment, and regional disparities in development, the country seems to have exhausted its growth potential.

    Investing in a well-fed, well-skilled, and healthy population alone can fire all cylinders of the economy. GDP numbers are, after all, meaningless unless the fruits of growth trickle down.

    Like they say: "growth for growth's own sake is the ideology of the cancer cell."

  • The promise of economic development during Narendra Modi's first term has now been completely sidelined by propaganda and polarising agendas. Will the upcoming union budget reflect any wisdom and course-correction?

  • India's fiscal sustainability is a weak point - the country hasn't been able to reduce its deficit. The fiscal deficit of the centre and the states combined at more than 6% of the GDP is about twice as much of the other emerging market economies. Corporate tax cuts to stimulate investment could further

    India's fiscal sustainability is a weak point - the country hasn't been able to reduce its deficit. The fiscal deficit of the centre and the states combined at more than 6% of the GDP is about twice as much of the other emerging market economies. Corporate tax cuts to stimulate investment could further widen the deficit which may lead to the government resorting to hefty reductions in spending (general elections are nowhere close) something that could prove counterproductive amid slowing private consumption demand.

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