The Indian economy has been growing, and the question on many people’s minds is whether GDP growth could reach 10%. According to economist Arvind Virmani, principal advisor to the Indian government’s Planning Commission, it is a matter of building on past growth. “Not too many people know that since 1980, India has been the ninth fastest-growing economy in the world in terms of per capita GDP and total GDP,” he says. Although India went through wide-ranging economic reforms in 1991, it was not until late 2006 that the effect of these reforms began to show up in the statistical evidence.
National accounts data suggest that GDP growth in India today is around 8%. What would it take to increase it to 10%? According to Virmani, part of the answer lies in an upswing in manufacturing. “For the first time in decades, we are seeing sustained growth [across the entire manufacturing sector] of 9%,” he says.