CONTROVERSY OVER SUSTAINABILITY OF INDIA’S FAST ECONOMIC GROWTH: FOUR FACES OF THE DEBATE

The Indian economy has grown by more than 8 percent per year since 2003-04. This achievement has triggered a debate around the question: Is the fast economic growth of India based on a sound foundation that will ensure its sustainability in the future? This paper reviews varied arguments within this debate and concludes that scepticism seems to outweigh optimistic perspectives. This perception emerges because the Indian labour force is growing at 2 percent per year which is even faster than that of China. A majority of this labour force will be absorbed in agriculture and informal sector which have low productivity. The services sector is booming, but it cannot absorb major proportion of the growing low- and unskilled labour force. India needs to take benefit of its advancement in the IT sector to increase productivity of its agriculture and informal sector for maintaining the fast growth of economy.