Ruchir Sharma,the emerging markets investment manager at Morgan Stanley, is an recognised authority, whose views on India's economy has wide acceptance among the readers. He has great expectations that Narendra Modi, if he becomes Prime Minister after 16 May, will be able to revive economic growth quickly by bold reforms and other actions. He even puts more emphasis on his arrival on the scene, that will surely lead to economic optimism, that may revive growth.
Ruchir Sharma says,"the reason why I am saying this is simple: individuals, however reformist they may be, do not have that big an impact on short-term economic growth. Also, big reforms happen only when the country faces a crisis. And when a crisis happens, any finance minister tends to be reformist."
He says that India has historically gone through an economic crisis every 10 years. In 1980, the country had to go to the IMF for a loan; in 1991, it again had to go to the IMF after we faced external bankruptcy; in 2001, after the global dot com bust and the post-Pokharan economic sanctions, India again hit a growth slowdown and the NDA was forced to reform; and this time, after 2011, despite a high economic stimulus, we ended up with an external current account crisis, high inflation and slowdown.
Yes Ruchir Sharma was critical on last one decade rule of UPA 1 & 2, as he draws value on India's internal in built strength, while regretted little addition by the present government in the period. He said, "India’s economic performance has always been about 1 percent to 1.5 percent above the emerging markets average, which tells us that we rise and fall with the emerging markets. UPA-1’s high growth was not made in India. Even Africa grew very fast at that time.However, denying that the recent economic slowdown in India had little to do with external factors and more to do with the mistakes made by UPA in 2009-12.
So what does this prove? The UPA’s high growth years in 2004-08 were the natural result of global factors. The slowdown would have been less harsh if we had not artificially boosted growth in 2009-12. We would still have been ranking No 25 in terms of emerging markets growth. We would be growing at 6 percent instead of below 5 percent.
INDIA HONEST justifies RC's observation on the reasons behind the dismal economic performance of last few years. Moreover the complete loss of confidence by the investors in the UPA government , there was a greater mismatch between the bureaucrats and the various related ministries, even the entire PMO was highly frustrated and nervous due to regular charges of corruption scams, and that led to worst performance of the growing economy of India.