The scale of India's economic challenge

The government shouldn't worry about the latest quarterly growth figures

Everyone is worried about the economic slowdown. In a 24x7 world of media, social media, hyper-connectivity and hyper-commentary, what matters most for observers of the economy is the latest quarterly GDP growth number or the latest monthly IIP release or which way the purchasing managers’ index is leaning. For constructive policy making, statistics which are discussed less frequently may present a more accurate picture of what ails the economy and therefore what is the appropriate medicine for recovery.

Two statistics, more than others, tell the story of India’s long-term economic challenge. First, manufacturing as a percentage of GDP is only 15