Neighbouring India’s Quarter 3 growth numbers are now out and GDP growth number has been recorded at as high as 8.40%, that % above the 6.64% consensus expectations among analysts and 0.80% up than even an already ambitious original forecasted target of 7.60%. Jumps in the country’s Chief Economist, Anantha Nageswaran, and he now wants to revise the growth target going forward to a minimum of 8%. He opines that the growth numbers add up neatly and come as no surprise to him and the potential for increased growth still remains largely unfulfilled – a brilliant way to lend confidence to businesses to not look back and just keep going! In contrast, its chief competitor for the mantle of the country with the highest annual output (albeit by combining enhanced productivity), China, is struggling with both, to keep its factories running at optimal capacity and the national growth numbers. One may argue that on the contrary, the recent developments in India in general are rather disturbing with the state institutions and democracy per se under attack by the present Sarkar and so naturally with a coming election these numbers could be tainted (Modi Sarkar touts the country’s economic success as its biggest selling point, never mind equitable growth or fair distribution) and perhaps somewhat exaggerated to cater to the need of the hour for the sitting government.

Back to growth, the chief economist in his quarterly analysis report, in essence, highlighted two main fundamental points: First, that the achieved growth rate is by no means a fluke. He insists that the present culmination of strong growth can easily be traced to perhaps the lag effects of growth policies and reforms that were in fact put into effect as early as 2016. For example, policies and reforms like the IBC (Insolvency and the Bankruptcy Code), Prudent GST slabs, and a low-interest rate regime were practically undertaken back in 2016, however, shocks like Covid-19 and the Ukraine-Russia war came in between. But the moment the impact of these disruptions started to fade away with time, the lagged effect of governmental policies and economic reforms in transition started to surface in full force. Also, in addition, there was a pent-up effect, meaning when the results came through the numbers not only came up strongly but also reflected in them the population multiplier effect harnessing upon the legacy deficits/shortcomings built over seven decades since Independence.

By simple resolution of long-standing structural fault lines combined with structural improvements – like the DPI (Digital Public Infrastructure – the momentum morphed into a force multiplier of a magnitude that baffles almost all conventional growth models. Second, the success is owed to consciously breaking ranks with other countries, by instead focusing on the supply side from India. This meant shoring up livelihoods, generating employment, and focusing only on investment in India that guaranteed more bang for the buck, both domestically and externally in the sense that it did not take a toll on India’s external account. Together with the rollout of hard infrastructure like highways, airports, ports, railroads, etc., the government ensured that not only it is done in partnership with the private sector to drive-up efficiencies, but also that the Indian private sector is facilitated in a way that domestic manufacturing gains new heights in offering to the Global buyers an alternate competitive solution to China.

These are the very sort of solutions cum vision that the Pakistani economic managers will also have to look into if a sustainable and meaningful economic recovery is to be launched in Pakistan. Thankfully, the Indian story also helps us in identifying the fault lines or the shortcomings of its journey that we need to avoid: Care needs to be taken the planned growth has a strong pinning on the SMEs, the concentration of wealth needs to be monitored and check and that the growth is, both responsible and equitable. While one wishes the finance minister Aurangzeb well in his current negotiations with the IMF to obtain the necessary short-term space that the country desperately needs, he must also at the same time remember that the real Honor and success come from providing relief to one’s people and not just by inflicting pain!

Dr Kamal Monnoo 

The writer is an entrepreneur and economic analyst. Email: kamal. monnoo@ gmail.com