Per capita income growth was 8.4 per cent in 2006-07. We are missing out per capita income growth of almost 12 per cent, and arguments about growth not trickling down are easily countered by data from National Sample Survey. While most policy changes are at the state-level, the Centre has a catalytic role to play. Not only has this government missed out on the positive side of assorted reforms that could have driven absolute real GDP growth to 13 per cent and per capita growth to 12 per cent, it has embarked on the negative, by jacking up interest rates and constraining growth. This doesn’t show in 2006-07, but will show in the first quarter of 2007-08, bringing growth down to 8.5 per cent, the lower end of the band. With non-reforms preventing supply-side adjustments, higher inflation and more interest rate hikes (say 0.5 per cent) can’t be precluded. The only salvation is that the economy is probably less sensitive to interest rate hikes than it was in 1996-97.