For the investors and businesses still swooning over India's red-hot growth, a pair of economists delivered a splash of cold water to their faces on February 23 during a talk organized by the University of Pennsylvania's Center for the Advanced Study of India.
Against a backdrop of growing concern about India's infrastructure constraints and the need for further institutional reform, the World Bank's Shanta Devarajan stirred the pot with what he called his "four heretical thoughts on India." He joked that a colleague familiar with Devarajan's provocative stance reminded him that "heretics are burned at the stake." As something of a counterpoint, though, Arvind Subramanian of the International Monetary Fund argued that India's infamously inefficient institutions, while certainly a drag on growth, aren't actually all that bad in comparison to other nations.
Devarajan, who serves as chief economist for the World Bank's South Asia region, takes issue with the popular notion that there simply isn't enough infrastructure -- power, water, transportation networks, etc. -- to sustain India's robust economic growth rate of more than 8.6%.
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