India’s real GDP growth slipped substantially after the North Atlantic financial crisis.
Return to a sustained high growth trajectory is feasible but it will need much more focused
attention to the revival of manufacturing and to the acceleration of investment in transport
and infrastructure. The immediate priority is to achieve the kind of fiscal quality and low
inflation levels exhibited during 2003-08, with focused attention to increasing efficiency
and compliance in tax revenue collection. Higher tax revenues can facilitate increases in
public investment, which then crowd in private investment. The task ahead will be more
difficult in view of the protracted slowdown in global growth and trade.