Question

Critically comment on the quality of growth that the Indian economy has experienced in recent decades. Answer in not less than 300 words.

Answer 1

Below are the comments that would sum up the quality of growth in the Indian economy:

1. India has sustained rapid growth of GDP for most of the last two decades leading to rising per capita income and reduction of poverty.

2. In spite of the growth in GDP there are still persistent trade and fiscal deficits due to inflation.

3. India has a fast growing population of working age.

4. India has a strong legal system and many English language speakers this has been key in attracting inward investment from companies.

5. India's economy has developed highly attractive and advanced clusters of businesses in the IT space. External economies of scale have deepened competitive advantages in many industries.

6. India is relatively a closed economy as it is a net importer of many primary products.

7. This country has a comparative advantage in many services industry such as Business software.

India's growth has been impressive in the resent years but the development is hampered by endemic structural problems. India requires significant investment in infrastructure, manufacturing and agriculture for rapid growth rates.