CRISIL has released a report, ‘Of Growth and Missed Opportunity’, which throws light on the implications of high and low growth. India witnessed an eight-year spell of near 9% GDP growth between fiscals 2004 and 2011, with the global financial crisis interjecting in 2009. While growth has since dropped below 5% things seem to be turning around. We believe India could now average 6.5% over the next five years, but a return to 9% growth levels is not on the horizon.
This report looks at the difference 9% growth makes compared with our 6.5% baseline call and an unseemly 5%. It shows the tangible benefits in terms of goods sold, jobs created and poverty reduced under the three scenarios. For example, 9% growth would mean 49 million less Indians below the poverty line and 10 million more two-wheeler purchases, compared to the scenario of 6.5% growth.
Policymakers and business leaders will find the equations handy when initiating remedial action.