India won 6 medals in London 2012 Olympics and expectations were high that the medal tally would improve in Rio 2016. Unfortunately, in the second week of Rio 2016, India is yet to win a medal and hopes of even one medal are low.
The fact is that though India has come a long way in the sports arena, the infrastructure for building a consistent world class Olympic team is woefully lacking. The case of Dipa Karmakar, who is clearly medal class, is a clear example of India’s unpreparedness for world class sports. If Dipa had trained in China, US, Europe or Australia or even in Brazil and Argentina, she would be on the podium for many events in Rio.
India requires building sports infrastructure, encouraging sports as a career choice at the grass root level and change attitudes of people on sports.
India’s economy is a similar story. The country is seen as one of the bright spots in the world economy, showing GDP growth of over 7% coupled with improving macros of twin deficits and inflation. Fiscal and current account deficit at 3.9% and 1.3% are down from 5% and 4.7% respectively seen three years ago. Inflation is down from 10% levels to below 6% levels. However, the domestic economy is still to live up to expectations.
Industrial production growth is still at low single digit levels at 2.1% for the month of June 2016. Export growth is yet to happen with exports down in July though June saw growth after a long period of negative growth. CPI inflation rose above 6% in July on higher food prices. Bank credit growth is below 10% as of July.
Given that the world economy is still on shaky ground, India could still falter on growth. One of the fastest growing sectors in the 1990 to 2010 period, the IT sector, is seeing growth coming off both due to technology and economic disruptions. The sector has slowed hiring, affecting thousands of fresh graduates in the country.
The government has projected a GDP growth of 7.6% for this fiscal year and while this growth is well within reach after having grown at the same pace last year, the quality of growth is yet to be ascertained. Sustainable growth comes from building a vibrant infrastructure that simplifies and lowers cost of doing business. GST, if implement on time in April 2017, is one big reform that will encourage business. More such big bang reforms are required like GST, especially in the public sector for the economy to become more productive.
Markets tend to go overboard on optimism when it comes to India given the hype but realism should also be very much there if boom bust cycles are to be averted.