The Eight Per Cent Solution: A Strategy for India's Growth

IT IS A WONDERFUL STORY, but time after time in the decades since Independence, it stops short midway. India is poised for growth. The GDP is rising. The lumbering elephant is turning into a tiger. But the leap doesn't quite happen. There has been enormous change, but alongside the problems have also been rising. And for a large mass of people, it remains a future of brutal poverty. If India is to meet the needs of its people, it has to consistently generate enough jobs for the millions of youth who enter the job market every year, and build up an infrastructure in which there is enough to go round for education, health and security of its population. Nikhil Gupta, chief economist with a leading brokerage, has been a close observer of the policies and factors that help India grow. As he puts it, an economy consists of four participants-households, corporate, government and external-and just three activities: consumption, savings/investment and external trade. However, the lack of attention to the finances of the household sector and the unlisted corporate sector is shocking. As too the gap between the real and the financial economy. It is these and other gaps in this complicated scenario that Gupta tries to bridge. The Eight per cent Solution presents Gupta's version of a grand unified theory that brings in the neglected but important elements to show how India can finally achieve that elusive target of a higher phase of growth.

About the Author :
Nikhil Gupta is Chief Economist and Senior Group Vice-President at Motilal Oswal Financial Services. He is a frequent contributor to business newspapers and a participant in consultations with RBI, NITI Aayog and other institutions on economic outlook. For the past seven years, he has handled the Economics desk at Motilal Oswal, where he covers data releases, writes thematic research reports and keeps his clientele updated of such developments.

Review :
'Nikhil Gupta has written a highly insightful book, impressive for how its analysis connects the dots between different parts of the economy-households, financial sector, corporates-listed and unlisted, and the government, as well as for laying out in a transparent manner how they all interact with each other and the global economy. I particularly admire the emphasis on the role of household savings, the importance of the unlisted economy to get an accurate employment picture, and complex interactions between the domestic and the external economy. Highly recommended for all wanting to understand the Indian economy, in-depth while covering all of its breadth.' 'This book will be a useful bridge between hard-core textbooks and purely journalistic writing. Nikhil explains the basic concepts lucidly, and more importantly, he stands out in a world full of two-handed economists by taking a position and giving his readers something definitive to disagree with.' 'Nikhil Gupta not only takes apart the economy for us, gives us a peek into its moving parts, explains what makes it tick and demolishes quite a few hallowed myths, but he also charts a way forward for India clinically, without either chest-thumping or breast-beating.' 'Nikhil Gupta does a tremendous job of explaining the nitty-gritty of how the Indian economy works and what needs to be done to achieve a very high rate of economic growth.' 'Nikhil Gupta has written a useful book on the key issue of how to get back to a regime of 8 per cent growth, if that is possible at all. His approach is to analyse the strengths and weaknesses of the financial balance sheets of the three important sectors of the economy. Linking the financial dimensions and real dimensions runs into many definitional problems. However, the freshness of the approach of Nikhil Gupta deserves recognition and further study.'