The downturn in the U.S. economy would not have much impact on India and other emerging markets as the consumer demand of a bulging middle class would enable them to grow at a faster pace than developed countries.
However, there could be some “brakes” in the growth path of emerging markets due to slow down in IT jobs, services and domestic inflation. India's economic growth rate would not be around eight, nine or touch double digits, said Prof. Bhaskar Chakravorti, Senior Associate Dean of International Business & Finance and Executive Director, Institute for Business in Global Context, The Fletcher School, Tufts University, Massachusetts, USA.
Talking to The Hindu here on Tuesday, he said the downgrading of the U.S. Government's credit worthiness by Standard & Poor was a “political decision” and was overblown. There was no question of the U.S. Government not repaying the debts. But the U.S. economy was affected by deep structural problems which was also the case with Europe.
Prof. Chakravorti is actively involved in the academic ties between the Indian School of Business (ISB) and The Fletcher School and also in the setting up Bharti Institute of Public Policy at the ISB's new campus at Mohali.
He said one of the biggest bottlenecks to sustain the growth of Indian economy was the shortage of human capital at every level. Referring to the growth of private sector, he said for sustaining the economic growth, there was a need for a partnership between private and public sectors and the political establishment.
One of the primary focuses of the Bharti Institute would be on best practices and innovation in public policy education.
He underlined the important role of public policy in relation to infrastructure, urbanisation problem, public health and security.
