This is the season for consultation, advice and endeavors to secure the attention of policymakers. The budget session of Parliament is around the corner and discussions on the working of government continues to be relevant in the Indian fiscal calendar. India’s latest quarterly GDP estimates, which were released in late November, pointed to a growth rate of 8.2%. The important question to ask here is: What must be done to sustain growth at or near this level over the next two to three decades? Ensuring this will decide whether or not India can achieve the goal of becoming a developed country when it completes the centenary of its Independence in 2047.

A long-term high growth path requires fulfilment of both necessary as well as sufficient conditions. The former is pretty much the bedrock of such a trajectory. Macroeconomic stability is among the most important necessary conditions for sustained high growth.

India has done remarkably well on this front. After Covid, notwithstanding the spurt which was inevitable during that period, the central deficit fell from 9.2% to 5.6% by 2023-24. Public debt declined from a peak of 89% of GDP in 2020 to about 82% in 2024-25. However, India’s past tells us that periods of strong growth can coexist with missed opportunities.

The first of these missed opportunities arose in the decades following Independence, when India chose a development strategy heavily influenced by Fabian socialism. While well-intentioned, this framework prioritised State control over markets, administrative allocation over price signals, and protection over competition. The result was a prolonged suppression of productivity in land, labour, and capital. The economy grew, but well below........

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