An excellent article on growth economics

The Hindu : Opinion / Lead : The growth model has come undone: "Unsustainable import competition and the end of the investment subsidy that the sale of under-priced resources provided to Indian companies are the main reasons why the economy has slowed down

What has been called the ‘golden age’ of India’s economic growth was underpinned by global integration, high rates of investment and savings growth and low current account deficits. The slowdown is characterised by a sharp deceleration in investment growth on the demand side and in agriculture, manufacturing and construction on the supply side, alongside high and unprecedented current account deficits.

The government’s argument that this is the result of the global economic slowdown and related uncertainty is only partly true. The deeper reason, which the government is either unwilling or unable to come to grips with, is the unravelling of the underlying growth model — partly due to structural change engendered by globalisation and partly because the investment subsidy implicit in under-pricing assets is no longer feasible."

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