Blog Can India’s economy keep up the pace?
While China aims to further diversify its export-driven economy by increasing domestic consumption, its neighbor to the south is hoping to do just the opposite. After overtaking China as the world’s fastest-growing large economy in 2015, India believes it will need to boost exports to keep up the pace.
Dr. Arvind Subramanian, Chief Economic Adviser to the Government of India, believes that relying on India’s domestic market to sustain economic growth rates of 8 to 10 percent a year will be a difficult proposition. “History is against that model,” Subramanian said recently at an International Monetary Fund/India-sponsored conference.
Subramanian—who has previously worked at the IMF and on the General Agreement on Tariffs and Trade (GATT) during the critical Uruguay Round in 1988-92—will give his assessment of the Indian economy, trade and other issues at the AIC on April 6. His keynote presentation is titled: India—Land of Opportunity?
“Where I think India can be unique is, instead of growth being led by low skill manufacturing, I think it is going to come about with a combination of manufacturing and services,” Subramanian said. “Manufacturing alone is going to be little bit difficult because of what is happening in technology and so on, but I think we could have a uniquely Indian model which is export-led but not necessarily exclusively manufacturing focused.”
The Indian government has projected GDP growth of 7.6 percent in the fiscal year ending in March 2016, up from 7.2 percent in the prior year. For the 2016-17 fiscal year, the government sees GDP growth between 7 and 7.75 percent.