Modi’s Growth Mythology Needs a Reboot
India’s slowdown can’t be reversed by coaxing companies to invest. Getting consumers to spend is the only way.
India is facing a growth slump that only consumer spending can fix.
Photographer: Dhiraj Singh/Bloomberg
India’s economy needs a readjustment, and not just in fiscal and monetary policies. The whole folklore around emulating China’s multi-decade investment boom is proving to be illusory. With growth at its weakest pace in four years, it’s time to put that legend to rest, and start helping ordinary families keep their heads above water.
Around this time last year, I wrote about India’s growth with Chinese characteristics: anemic consumption and overemphasis on investment. Back then, the myth of an impending tsunami of capital expenditure was still trumping the reality of a sharp slowdown in retail spending, and Narendra Modi was about to launch his bid for a third five-year term.