impacted many other emerging market countries,
but the main driver has been a nearly full stop of
domestic investment activity, by both the govern-
ment and private sector.”
The easiest place to spot the slowdown is in
infrastructure. As far back as 2009, Goldman Sachs
estimated India needed to invest US$1.7 trillion over
the following 10 years. But US$110 billion in infra-
structure projects has been stalled because of India’s
infamous bureaucracy, according to a March 2013
report by a consortium of state-run banks. One of
the high-profile projects in limbo is the US$1.5 bil-
lion Mumbai Trans Harbor Link, which would have
been the country’s longest sea bridge.
or a long time,
it looked like
get in the way of
Spurred by a healthy pri-
vate sector, India experienced record
GDP growth over the past decade, soaring as high as
10 percent in 2010, second only to China among the
world’s largest economies. At the same time, India’s
poverty rate plummeted from 45 percent in 1994 to
22 percent in 2012, according to McKinsey.
But India’s mighty “tiger” economy has stumbled.
Last year, the country’s economic growth dropped
to a decade low of 4. 5 percent, with the rupee falling
13 percent against the U.S. dollar. India still ranks as
Asia’s third-largest economy, but this year’s overall
economic growth is expected to reach 5 percent,
with an inflation rate hovering at 8 percent.
India has slid into “a profound slump,” says Russell Green, PhD, Clayton Fellow in International
Economics, James A. Baker III Institute for Public
Policy, Rice University, Houston, Texas, USA.
“It has been hit by the global slowdown that has
“[India] has been hit by the global slowdown that has
impacted many other emerging market countries, but the
main driver has been a nearly full stop of domestic investment
activity, by both the government and private sector.”
—Russell Green, PhD, Rice University, Houston, Texas, USA