What’s Holding Back India’s Economy?

India will need to think beyond physical assets to continue its growth.

I still like playing board games with friends and family for amusement during my leisure time. Recently, I have been enjoying the game ‘Catan,’ a settlement-building activity in which up to four players compete to earn resources and construct buildings across a small island. It involves trading with others to grab the resources you most need, enabling the creation of new settlements that earn victory points.

Roads do not provide victory points, but they are crucial for establishing new developments. The same is true outside the fictional island of Catan: Roads are central to economic development. Sound infrastructure is crucial for an economy to realize its full potential. This is especially so for a nation like India, where infrastructure has been the missing piece in the country’s growth story.

India has been one of the fastest-growing major economies for the past decade, with an average annual growth rate of real gross domestic product (GDP) of 5.7%. It has stood out for its economic resilience during a time of global macroeconomic uncertainty and volatility. This year, India is clocking an impressive 7% real growth rate at a time when its peers are slowing down. It has managed a transition from being a “Fragile Five” member a few years ago to the world’s fifth largest economy today.

Nominal GDP Trillion