From Economist: Story of rising India Now many are worried that India is squandering this demographic opportunity. This is partly because the economy is in a funk. Growth is at 4.5%, half the rate at the peak in the mid-2000s. Industry is 27% of output, compared with 40-47% in other big developing Asian economies. High inflation has prompted households to store ever more of their savings in physical assets rather than the financial system (see chart 2). The costs are clear. With few manufacturing exports, India has a chronic balance-of-payments problem. And India has created too few formal jobs in the past decade. India’s leaders have long said they are committed to employment, but have shown little stomach for the economic upheaval rapid job creation entails. China’s policymakers accepted that the process of adding jobs overall often destroyed jobs in particular industries and places. For years India’s politicians have preferred economic palliatives such as NREGA, a giant scheme that guarantees work for the rural poor, and subsidies for the needy.
Posted on: Thu, 04 Jul 2013 08:59:56 +0000
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