| Mahesh Vyas: Fostering momentum top job |
| BS Reporter / New Delhi February 28, 2007 |
| The first issue highlighted in the Survey is sustaining high growth with moderate inflation. The Survey is quite positive over growth and does not think that inflation will be a spoiler. I quite agree with this position. However, reasons for this optimism cited by the Survey seem somewhat stretched. For example, it argues that the current high growth combined with a growing proportion of working-age population will lead to a rise in savings and result in more investments, thereby fuelling further growth. However, the current rise in savings is mostly due to the rise in profits of corporates and the turnaround in savings of the government, than the household sector. Other reasons cited for the sustained growth are equally weak. This is a pity. The strong economic performance in recent times merits a more robust analysis than I found on the pages of the Survey. The Survey also argues that inflation is essentially a problem of capacities and skills. If these can be increased, then a rise in supplies will reduce inflation. Thus, given that investments are on the rise, the economy does not face the danger of overheating to an extent that will adversely affect growth. On the issue of inclusive growth, the solution offered is simple |
