How India can achieve 10% GDP growth annually?

India needs to double its infrastructure spending to USD 1 trillion in the five years to 2016/17 to achieve 10% annual growth rates and this would require new funding sources. We need to upgrade its creaky and inadequate infrastructure to support growth that is expected to accelerate to 9% by 2011/12 the bulk of the investment of whose should be from private firms. We would need continuous improvements in our policy regime and our implementation process.

Indian system is fraught with rampant corruption at all levels. This checks the real productivity to reflect in the economy. Ill earned money goes out of the country and parked in foreign banks that do not add to the momentum of the Indian economy that is badly needed today.

Secondly genuine enterprises remain under pressure particularly in cast ridden Indian social system that plagues all Indian villages, small town and even small cities in the north. The cast system and too much practice kill the genuine entrepreneurs to take up any profession of their choice. Lack of encouragement, unnecessary denouncement and criticism choke down youngsters to show their skill until they migrate to cities where they don’t require any cast identity to exhibit their skill and strength. They flourish and let the country also flourish along with.

Microsolar Brrain

Any economy can grow only if there is higher level of investment oftake year on year basis. In India this may not be possible due to lack of state of the art infrastructure for economic growth thogh we have a huge underdeveloped population willing and ready to get into the market action. So it depends on how the succesive governments will respond to this opportunity of citizen being empowered to participate in the economy of the nation.

I have been called names for this but it does not matter. For many years now, I have been arguing for a 15 - 18% growth rate. A country of our size and demographics cannot get into the developed league unless we decide to run - not just crawl. What are the key issues that we need to look at?

1. We need to be an honest and hard-working nation. It is a shame that the largest democracy in the world is at the bottom of the pile when it comes to honesty. Look at the countries with the highest Human Development Index. They are nearly corruption-free. Similarly, we attend offices or factories but do not work. How many of us can touch our hearts and say that we are genuinely earning our paycheck? Empirical studies have shown that you can retain your job by working at 30% of your capacity. Imagine what would happen if we double this.

2. The key to high growth is rapid strides in agricultural productivity. We need a second green revolution but of a different kind. The spectacular success of the cooperative movement in milk needs to be replicated in the agricultural sector. Our typical land holdings are too small. We cannot make use of modern methods and we cannot increase productivity. Form cooperative farms of 1000 acres and more. Let the government invest on the equipment instead of giving subsidies. See the magic it will do to agricultural productivity. Imagine what would happen if agrigultural growth rate were to touch 7 - 8%.

3. We need less of government and more of governance. It is worth noting that the sectors that have seen the most dramatic growth in the last 15 years are those in which the government has had little or no role to play. Why not learn lessons from this? Why shouldn't the government be just a facilitator and nothing else? The only exceptions to this would be defense and national security.

Finally, let us stop expecting some manna from the heavens to do this magic for us. Let each one of us resolve to walk the talk. Then see the magic unfolding.