India’s Economic Growth

To the Editor:

I take issue with your Feb. 10 editorial “India in the Slow Lane.” Growth in recent years has been among the fastest in the world, sustained by capital formation, including in infrastructure. The once-enviable pace has slowed along with the rest of the world’s, but the government has acted quickly to lift market confidence, boost investment and address fiscal deficits and trade imbalances.

A recent report by the International Monetary Fund called India’s growth prospects strong. The reasons are clear: favorable demographics, resilient economic institutions, a stable democracy, a vigorous anti-inflation regimen and continued infrastructure improvements.

In addition, a new Cabinet Committee on Investments and an infrastructure debt fund are set to accelerate major foreign investments.

The budget proposals announced on Feb. 28 aim at restarting the investment engine and restoring fiscal sustainability while focusing on inclusive development.

Despite an unfavorable external environment, India’s economy grew at 8 percent a year over the five-year period ending 2011-12; during the next five years, it is projected to grow at more than 8 percent a year. That’s not slow.

NIRUPAMA RAO
Ambassador of India
Washington, Feb. 28, 2013