This refers to Anoop Singh's article "India in a three-speed world" (May 7). Despite witnessing double-digit growth in the post-recession period, India has been devoid of robustness to sustain itself. It eventually collapsed like a stack of playing cards. The problem is deep-rooted. The lower stratum, consisting of 70 per cent of the population, is dependant on growth emanating from urban areas, mostly driven by the service sector, which has the advantage of turning investment into fast cash. The manufacturing sector has grown moderately since it does not have much advantage in competing with other emerging economies. At the same time, there are infrastructure bottlenecks, and skilled manpower is not easily available. The state of the power, mining and other tangible sectors is appalling. Besides, irregularities in mining, gas, 2G and coal are sending investors a negative message. The countercyclical measure cannot work for the economy's recovery given its huge external deficit. Moreover, the current account deficit has added to the nation's woes, and "fiscal space" is being created by downsizing the earlier expenditure. The road ahead is bumpy. Internal quantitative easing will not be helpful because inflation is too high. At this moment, India is actually in the first two speeds - similar to the US and Japan - thanks to dim prospects of investment, a fiscal reverse gear and monetary tightening.
R K Arya Faridabad
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