There is much self-congratulation about, and much appropriation of, our growth rates these days. Much of this congratulation is warranted. Our economy is today the second fastest growing economy in the world. (Incidentally, remember how our commentators used to deride us with, and distance themselves from, the “Hindu rate of growth”. Who is accounting for the 8 per cent growth today? The same Hindus! You can bet that those who were calling that “the Hindu rate of growth” will never but never call this “the Hindu rate of growth”!) The achievements of the services sector are well known. The lesser noticed story is about the Indian manufacturing sector: it has been reinvented on the shop floor. You go to the manufacturing plant of a company like Bharat Forge — it is what we used to read about Japan: a “lights-out factory”. The entire process is CAD-CAM: Computer-aided Design, Computer-aided Manufacturing.

This reinvention and the consequential confidence are showing up in the results: Indian companies have acquired close to 250 companies abroad — this year, what with the Tata’s spectacular acquisition of Corus, India is liable to be the largest foreign investor in Britain!

But there is a central point to this growth. The trigger for it has been that because of reforms — of the first two and half years of Narasimha Rao’s government and of the six years of Vajpayee’s government — the dead hand of the state has been lifted from large swathes of our economy. This has created the space for the long-suppressed entrepreneurial and middle class professional classes of India to work more to their potential.

... contd.