It may seem premature to be discussing a recovery from India's current economic crisis when economic growth has collapsed to 4.4 per cent and is still slowing, manufacturing output is actually falling, job losses are mounting, consumer inflation remains high, the rupee and external finances are still very stressed and the fiscal deficit continues to widen (over 60 per cent of the full-year estimate in the first third of the fiscal year).
Most investment banks and multilateral agencies are now pegging GDP growth for 2013-14 at or around a dismal four per cent.
Nevertheless, with a bit of luck and a dash of optimism, one could envisage the current year as the nadir of this crisis and begin to focus on the shape of the post-crisis recovery.
The last time the Indian economy was in a comparable mess was in 1991, 22 years ago.
Then, as we all remember, the newly formed Narasimha Rao government with Manmohan Singh as its finance minister launched a programme of stabilisation and structural reforms that helped restore economic buoyancy with remarkable alacrity.
GDP growth, which had plummeted to 1.4% in 1991-92, rebounded to 5.4% in 1992-93 and accelerated steadily to average over 7% in the three years from 1994-95 to 1996-97.
If something similar could be engineered in the coming years, we could easily revert to 9% plus growth by 2016.
Alas, the likelihood of such a strong recovery looks vanishingly small.
Let me outline some of the reasons for this bearish outlook.
Text: Shankar Acharya, Business standard
The writer is honorary professor, Icrier, and former chief economic adviser to the government of India.