In his article “The new Indian normal” (April 13) Akash Prakash has defined two alternative scenarios for the Indian economy in the medium term. His best-case alternative is nine per cent GDP growth, four to five per cent inflation, 38-39 per cent of GDP investment, 25 per cent corporate earnings growth and declining interest rates. His worst-case alternative is seven per cent GDP growth, six to seven per cent inflation, investment languishing (at the current 34 to 35 per cent) and interest rates failing to come down significantly. The reality will depend upon what tens (if not hundreds) of thousands of Indian entrepreneurs and tens (if not hundreds) of thousands of mostly foreign investors do individually — and is likely to be something in between. This is not bad at all compared to what is likely in the rest of the world.
While quick implementation of the direct taxes code the and goods and services tax and faster processing by government at both the Centre and in states will be a big help, the basic policies of the central government and the Reserve Bank of India are quite sound. The sense of gloom and doom that lobbyists for foreign investors and India Inc are trying to create (presumably in the hope of getting more concessions) is uncalled for.
In “A deepening sense of gloom” (April 27) Akash Prakash has listed three positives for India — the unquestionable demographic advantage, the drive, flexibility and highly dynamic nature of Indian entrepreneurship, and the expectation that the current supply-side and policy rigidities will be addressed in the near future. Another unquestionable positive is the potentially enormous size of the Indian market with increasing purchasing power rapidly coming into the hands of the vast number of poorer Indians.
Alok Sarkar Kolkata
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