India - Let's look at some of the deeper rooted issues like the nation's current account deficit woes, slow pace of economic reforms, and decline in investment because of corruption.

What's The Matter With India?

by 

Mamta Badkar

India's GDP climbed 4.8% year-over-year in the January-March quarter.

This was the slowest pace of growth in a decade.

For the fiscal year ending March 31, growth was 5%, down from 6.2% the previous year.

Economic growth has been slowing for nearly three years.

India has massive potential, and in the early part of the century was identified by Goldman's Jim O'Neil as one of the BRICs. So what explains the persistently mediocre performance? At the moment there are certain cyclical issues, but big picture, the country suffers from corruption, horrible infrastructure, and protectionism.

On the cyclical front we have problems like declining consumer confidence, declining industrial output, poor monsoons, and weakness in the rupee.

"Supply and policy obstacles have seen growth decelerate and investment and industrial output slump, with the stasis compounded by weak global demand," said ADB Chief Economist Changyong Rhee in an April report. "Policymakers need to remove structural hurdles to faster growth, and while there have been some encouraging recent reforms, more is needed."

Let's look at some of the deeper rooted issues like the nation's current account deficit woes, slow pace of economic reforms, and decline in investment because of corruption.

The Current Account Deficit Problem.

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