Editor’s Note: This article was originally released in the India Economy Review, published by the IIPM Think Tank, Hyderabad.
How worried should India be by the global economic crisis? Will the crisis impact India’s overall growth trajectory and thus mark the end of the country’s growth miracle? This essay will examine India’s long term economic outlook in light of the crisis and consider how policymakers should respond. We begin by revisiting India before the crisis and the reasons for optimism. We then explain why the direct impact of the crisis on India is expected to be small and temporary before exploring how the political repercussions of the crisis may still threaten India’s long term prosperity. This leads to a call for India’s policy makers to maintain a long term perspective in order to realize India’s enormous growth potential.