The purpose of this paper is to take a dispassionate look at the performance of the Indian economy in the light of its recent growth rate acceleration. After 2000, it recorded several years of vertiginous gross domestic product (GDP) growth rate, which made some think that the growth trajectory of the economy is shifting upwards. A careful data analysis reveals that growth optimism is misplaced. There are several areas of the economy that have suffered from limitations and long‐term neglect of the policymakers. The paper clearly and concisely enumerates them. What is disconcerting is that these long‐term weaknesses were not addressed and are still persisting. Sluggish and tardy reform implementation is one of the serious bottlenecks. In addition, in 2008, myriads of domestic and global factors coalesced to drive GDP growth rate sharply down.
This paper carefully analyzes the current economic data to examine whether the recent GDP growth rate achievement can be sustained.
The principal inference of this paper is that the growth spurt of the Indian economy is unsustainable. Although the economy has a great deal of potential, expectations of a China‐like growth in the foreseeable future are totally unrealistic.
The paper proposes a pragmatic plan to break out of this economic quagmire. The value of the paper lies in its succinct and objective analysis of the Indian economic performance, its recent past and the immediate future. Without overlooking its recent achievements, the paper provides a credible vision of the future performance of the Indian economy.
