On Tuesday, in my regular weekly column, I had written that the GDP data for 2016-17 released on May 31 was a wake-up call for the Indian government and for the Reserve Bank of India. The decline in the ratio of of Gross Fixed Capital Formation to GDP to around 25.5% in the fourth quarter of 2016-17 in nominal terms was a shocker to me. This is not the stuff of a big-league economy.
What has gone wrong? There are several culprits and each one must do what they can do instead of arguing that someone else must act first and only then will their actions be meaningful. We do not know in economics with such precision. We act and hope for the best. That is the best that can be said about economic policymaking.