The Economist's India survey 'India's Shining Hopes' has examined the origins of the present buoyant optimism in the country and concluded that much of it is overdone or, at least, based on hope rather than achievement.
However, it argued that this is indeed a moment of shining economic opportunity for India, and that if Vajpayee's Bharatiya Janata Party succeeds in leading its coalition to another election victory, it should be better placed to take advantage of it, and pursue the necessary reform, than has been any government in recent years.
"Shining brighter, however, than any GDP growth target is the prospect of some lasting reconciliation with the twin from which India was so bloodily separated at birth in 1947," it said referring to the on-going talks with Pakistan.
Delving into India's current outlook, foreign policy, political and economic situation, the survey tried to find out is India really shining.
Strong recent economic growth, demographic growth and the outsourcing boom are seen as key factors contributing to the feeling of buoyancy.
However, the concern areas -- unemployment, widening fiscal deficit, under-investment, widening polarisation between rich and poor parts of the country -- continued to drag the economy downwards.
The survey questioned whether the recent strength of the economy is merely a cyclical blip due to a bountiful monsoon.
In the third quarter of fiscal year 2003-04, the GDP grew at an annual rate of 8.4 per cent. The full benefit of the abundant monsoon had yet to show up in the figure and hence growth of more than 8 per cent for the whole fiscal year seemed well within reach.
The survey also referred to the other indicators glowing with health: over $100 billion foreign exchange reserves, stock market posting its biggest annual rise in 12 years and low inflation and inflation rates.
"Externally, the global economy is on the upswing; China next door was booming, and for once this was seen as an opportunity rather than a threat: and the globalisation of services in international business played to India s strength," it said.
The Economist survey of India concluded that India faces a uniquely favourable domestic and international environment to make the policy reforms needed to take India to its next rung of development.
