India's economy: Some reflections on its shaky future

•The Indian economy's future is more uncertain than often presumed.•India's growth trajectory characterized by many mutually reinforcing imbalances.•India will be prone to severe economic strain and even crises.•Economic factors will also call forth political unrest and instability.

Contrary to many optimistic perceptions about the Indian economy's future prospects, this paper argues that the next two decades will be a period of great uncertainty. A path pockmarked with great economic and political turmoil, rather than a sustained and smooth process of economic expansion is what is likely. These are inherent in the growth trajectory of the Indian economy – which will continue to be biased towards services and construction activities rather than manufacturing and which will bypass the majority of Indians. If there is to be any different story, it will not come from the economic trajectory endogenously producing a shift to a more stable trajectory. Rather, it is the politics of redistribution that it may give rise to that has to be the source of change. The fact that it may give rise to such a politics does not, however, mean it will.