Getting the stimulus right

Smart state intervention in select labour-intensive industries can create comparative advantage and boost India's manufacturing sector

Measures to stimulate growth are now being discussed as key parameters of growth, investment and off-take of bank credit continue to fall over successive quarters. This is a welcome development as there was the sanguine comfort of being one of the fastest growing large economies with prudent macroeconomic management combined with the optimism flowing from the expected benefits of the various reform initiatives. India did put in place a stimulus package in response to the global financial crisis in 2008-09. This worked and growth bounced back quickly enough and was good till 2011-12. 

Thereafter, neither industrial production nor private investment has