The growth path India must take

'The need of the hour is the building up of macro-financial, fiscal, and external buffers', said the authors

The beginning of a global recovery that should be music to us during difficult times could actually turn out to be a threat. Not only are commodity prices, such as that of oil, rising, but there is also escalating price growth in the US and other major economies that is causing rising expectations amongst investors that rates will rise. This will, in turn, push up bond yields and make public debt more expensive. Since the inflation in these economies is accompanied by better growth prospects, there is the correlated risk of a capital outflow from emerging markets, such as India,