Where are the ingredients for a bigger cake?

The Prime Minister Narendra Modi wants India to be a $5 trillion economy by 2024 when he will face the next general election. So let it be written, so let it be done. The Budget has been designed to stimulate private investment but the supply side cannot improve unless demand increases, wrote R Menon. When pigs fly, said some pundits. In response, Modi called them "professional pessimists". "The size of the cake matters," he said. "The bigger the cake, the bigger the share of everybody in it." Except taxpayers, who have to pay surcharge and cess for the privilege of being threatened with extreme prejudice. A $5 trillion economy is possible "If the Indian economy does really well, the rupee should appreciate and that's good for striking the target," wrote economist Bibek Debroy. There has to be high growth with low inflation. In 1973-74 nominal growth touched 22%, but "In that remarkable year, the inflation rate was around 18.4%." Since government expenditure cannot increase without increasing fiscal deficit investment has to increase to 38% and household savings to 24% of GDP. "Therefore, we are probably going to witness a gradual inching up of growth to 8% and even 8.5%." India can never emulate East Asian economies which were "run by autocrats who favored a powerful but small government focussed almost exclusively on supporting export manufacturers, which meant investing in roads and factories, not welfare for the poor and weak", wrote Ruchir Sharma. "Contrast those attitudes to India, where government is suspicious of the private sector, and elections are fought on promises for the poor, the elderly, farmers and many others." Not the whole private sector. There is a large segment of friendly crony capitalists who are thriving. So much so that Modi's party the BJP raked in Rs 2.10 billion from anonymous electoral bonds before the election. If India is to double its economy in 5 years, "It would need to roll back government, reduce taxes, cut welfare spending and reallocate funds for new roads, bridges and other infrastructure, which is turn would boost private investment." The government has been reduced from 77 ministers in 2014 to 57 this time round, but this is just the beginning of this government. The government announced Rs 6,000 per year to all farmers at a cost of Rs 870 billion. When farmers spend the money on groceries the government counts that in the gross domestic product (GDP). In effect, the government is buying those products with taxpayer money. How can that be growth? The size of the cake can increase only if all the ingredients increase. Not by throwing stuff around.