The impressive 9.4 per cent Gross Domestic Product (GDP) growth rate registered by the economy during 2006-07 reflects the current phase of high profile growth being witnessed by the Indian economy. Pulling the economy out from the orbit of low growth and placing it on trajectory of high growth is, no doubt, a commendable job. The new growth figure also enhances the economy’s confidence to achieve annualised 9 per cent growth rate as targeted by the Planning Commission during the Eleventh Plan (2007-2012). The government is aiming at 9 to 10 per growth rate on a sustainable basis because high growth rate is prerequisite to meet basic challenges facing the country like eradicating poverty and creating jobs for millions.

Bigger challenge is how to sustain this high rate of growth over the years? Experience has shown that overall growth of the economy is predominantly influenced by the performance of the crucial agriculture sector. The ongoing phenomenon of prolonged slowdown in the agricultural sector is, in fact, pulling back the growth momentum. The economy is growing primarily because of robust and agile growth in the manufacturing and booming service sectors. Reversing the deceleration in agricultural growth is the basic challenge now facing the economy. It is being overwhelmingly felt that lack of any breakthrough in agricultural production technology in recent years is leading to current spell of stagnation in farming sector. This calls for concerted efforts to promote development and dissemination of up-to-date agricultural technologies. Besides, priority must be given to the development of rural infrastructure, which supports the very backbone of agriculture.

The other vital input required for sustaining high growth rate is to provide the enabling environment that promotes savings and investment. This in turn calls for necessary policy initiatives that sharpen the efficiency and competitiveness in every faculty of economy. These efficiency enhancing policies will involve innovative approach with enhanced focus on introducing more reforms in every sphere of economic activity. The challenge is to resist compulsion of competitive politics and go ahead with the required reforms. The ongoing acceleration of GDP growth rate is now giving rise to a more complex challenge of ensuring equitable and inclusive growth. It is now essential to ensure that every section of society—especially the poor—reap the benefits of high economic growth proportionately. If this does not happen, the very sustainability of high growth will be in jeopardy in the face of growing social unrest.