ratio has been on a declining trend, from 73. 2 % in 2006 – 07 to 66 % in 2012 – 13 ( and the central government ’ s debt / gdp ratio is only 46 % ). moreover, the debt is denominated in rupees and has an average maturity of more than nine years. bis central bankers ’ speeches india ’ s external debt burden is even more favorable, at only 21. 2 % of gdp ( much of it owed by the private sector ), while short - term external debt is only 5. 2 % of gdp. india ’ s foreignexchange reserves stand at $ 278 billion ( about 15 % of gdp ), enough to finance the entire current - account deficit for several years. even if you count all of trade credit as well as maturing deposits held by overseas indians as short term debt, india ’ s reserves can pay them all down and still have money left over. that said, india can do better – much better. the path to a more open, competitive, efficient, and humane economy will surely be bumpy in the years to come. but, in the short term, there is much low - hanging fruit to be plucked. for instance, we are committed to developing our financial system, and carefully expanding access to finance can be a source of tremendous growth in the years to come. we are also embarked on large infrastructure projects. for example, the delhi mumbai industrial corridor, a project with japanese collaboration entailing over $ 90 billion in investment, will link delhi to mumbai ’ s ports, covering an overall length of 1483 km and passing through six states. this project will have nine mega industrial zones of about 200 – 250 sq. km., high speed freight lines, three ports, six airports, a six - lane intersection - free expressway connecting the country ’ s political and financial capitals, and a 4000 mw power plant. we have already seen a significant boost to economic activity as india built out the golden quadrilateral highway system, the boost from the delhi mumbai industrial corridor can only be imagined. the best of india is yet to come. back to the cricketing analogy, india is an open argumentative society. but we are prone to mood swings, perhaps more so than other societies, perhaps in part driven by our excitable competitive and very young press. stripping out both the euphoria and the despair from what is said about india – and from what we indians say about ourselves – will probably

not structural problems. they are all fixable by means of modest reforms. this is not to say that ambitious reform is not good, or is not warranted to sustain growth for the next decade. but india does not need to become a manufacturing giant overnight to fix its current problems. the immediate tasks are more mundane, but also more feasible one : clearing projects, reducing poorly targeted subsidies, and finding more ways to narrow the current - account deficit and ease its financing. over the last year, the government has been pursuing this agenda, which is already showing some early results. for example, the external deficit is narrowing sharply on the back of higher exports and lower imports. the government and the reserve bank said it would $ 70 billion this fiscal year, down from $ 88 billion last fiscal year, but recent data suggests it could be lower still. this leads me to another point. because analysts keep looking for major structural reforms to fix the deeper economic challenges, they ignore smaller steps or dismiss them as “ band aids ”. but strategically placed small steps – strategic incrementalism for want of a better term – taken together can deal with the immediate problems, thus buying time and economic and political space for the major structural reforms. put differently, when the indian authorities said they would bring the fiscal deficit below 5. 3 % last year, no one believed them. the final outturn was 4. 9 %. similarly, while we project the cad to come down to 3. 7 % this year, i think we could be pleasantly surprised. not all the actions we have taken are pretty, and not all are sustainable, but they have done the job. indeed, despite its shortcomings, india ’ s gdp will probably grow by 5 – 5. 5 % this year – not great, but certainly not bad for what is likely to be a low point in economic performance. the monsoon has been good and will spur consumption, especially in rural areas, which are already growing strongly, owing to improvements in road transport and communications connectivity. the banking sector has undoubtedly experienced an increase in bad loans, often owing to investment projects that are not unviable but only delayed. as these projects come onstream, they will generate the revenue needed to repay loans. india ’ s banks have the capital to absorb losses in the meantime. likewise, india ’ s finances are stronger than in the typical emerging - market country, let alone an emerging - market country in crisis. india ’ s overall public debt / gdp