The Warranted Growth-Rate...

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  Industries should be local to villages where wages are cheap... and there is manpower... Industry may use more labour when real rates are also expected to go down in the medium term... Investment should be hedged through derivatives... The capital-labour or labour-capital ratio or the ratio of the cost of the both is also expected to go down... A lower ratio should increase both consumption and investment... It is a stylized fact that real-wages and real interest-rate would go down in the long-run because population could go down and supply may go up... A lower inflation expectation would increase spending... Lower real interest rate might be positive for the economic-growth rate... Growth expectations may improve...



In The Developed-World...

Lower cost of supply - lower real interest rate and lower real wages - and lower population growth-rate have made supply outpace demand and lower the price-level, and lower oil prices have all contributed to low inflation and low inflation expectation... Fundamentally we are in a lower price regime...

Protection for the sake of domestic un/employment might be feasible... If it increases domestic economic-activity and the economic growth-rate... in terms of jobs... more domestic jobs must come-up...

The government might bring out tenders where it thinks there is potential... It should guide investment... The government has the data...

Foreign FPIs can make the market dance on their tunes... The magnitude of their demand is very large... They could destabilize the market very easily... Hot money should be controlled for the sake of domestic-investors... FPIs must invest for atleast three months before they are allowed exit... Too much volatility on the downside should be restricted... SEBI should think over making the market more attractive for investors...