Opinion- India Stays on Path to Economic Failure
By Derek Scissors, Ph.D. The Heritage Foundation Thursday was a really bad day for the Indian economy. Gross domestic product (GDP) growth for the October–December quarter came in at 4.5 percent, continuing to weaken. Worse, the central government budget for the next fiscal year leaves India on the same, failing course it’s been on of undisciplined spending and unrealistic expectations. First, GDP. GDP is a measurement of economic activity, not economic prosperity, and it is badly understood and used in describing performance. It is certainly possible for India to report 4.5 percent GDP growth in a healthy economy, even if this is a far cry from the pre-crisis pace. However, the Indian economy is not healthy. Consumer inflation remains above 10 percent, where it has been for years. More attention is paid to the wholesale price index, but it is consumer inflation that bears more directly on buying power. T...