Hong Kong-Gurgaon: China is passing through a mid-life crisis. The child prodigy has entered tough middle age. After 35 years of scorching economic growth with few parallels in human history it is today confronting a very different and sobering reality. Economic growth is markedly slowing down and leaders are resetting expectations of mostly domestic populations to a “new normal” growth of around 7 per cent.

This is nothing to scoff at; but it can feel miserable with 10 per cent growth becoming an addiction and nearly taken as a birthright. The relative slowdown has considerable ramifications. Roy Smith, a former partner at Goldman Sachs who rightly called the Japanese decline in the mid-1980s, has recently noted that “China is likely to end up as a former would-be superpower". More ominously The Wall Street Journal spoke a fortnight ago of a possible full-scale crackup in the country with the elite ready to flee at short notice (“The Coming Chinese Crackup” by David Shambaugh on 6 March).

While some of this can be dismissed as hyperbole, there is no denying that the dragon is running out of breath. At the same time, the elephant across the southern border is rousing from slumber. India over the last nine months is getting into the groove.

India has been a bewildering and frustrating country to track over the period that China was blazing the globe with its version of controlled and regulated growth. India is immensely diverse. Its rambunctious democracy is a polar opposite to China. John Kenneth Galbraith, the US economist and diplomat who served as the American ambassador to India, mentioned it as a “functioning anarchy”.

There is no gainsaying that India often has been its own worst enemy. By a quirk of history, at the time in 1979 when China embarked on its growth odyssey, India took a different route of immense socio-political churning amongst its vast population. The result was that starting in the late-1980s, India was ruled by a series of disparate coalition governments representing narrow regional interests where governance was reduced to the lowest common multiple acceptable to all partners (in India, this is poetically called the Common Minimum Programme of governance). Galbraith must have felt vicariously validated!

The nadir of this coalition mayhem reached in 2004 when a Left-of-Centre gaggle of regional parties led by the Indian National Congress (India’s version of GOP) assumed office. In the driver’s seat was Sonia Gandhi, Italian by birth but claimant to the legacy of the Nehru-Gandhi family. This coalition called the United Progressive Alliance (or UPA) would go on to rule the country for the next 10 years through to May 2014. The ten-year period was India's lost decade.

The only “progressive” thing about the UPA was the steady and inexorable decline in governance and leadership. Corruption at the highest places reached mind-boggling proportions and policy-making was paralyzed. The result: India slid to a 4.5 per cent GDP growth rate towards the end of the decadal period. The world had given up on India. Internally people chaffed at the possibility of regressing to the so-called “Hindu” GDP growth rate of 3 per cent and the primary economic philosophy of more evenly distributed poverty. A sovereign credit down-rating to junk status was a real possibility.

The inflexion point came in the May 2014 general election. For the first time in 25 years, one single party, the Right-of-Centre Bharatiya Janata Party, won an absolute majority in Parliament. The broader coalition, the National Democratic Alliance (NDA), had a phenomenal 63 per cent of seats. The BJP was led by its arguably polarizing but unarguably decisive leader, Narendra Modi. A deeply frustrated and embittered electorate had booted out the UPA and given a clear mandate to the BJP to lead and to govern.

The results of the last nine months have been electrifying. Seemingly India is back in business. Finally it has a real possibility of achieving its true potential. Domestic consumer and business confidence has turned from despair to assuredly positive and the world has started to take note of India again.

The recent economic budgetary exercise (the oomph factor of the annual budget announcement in India is a combination of Woodstock and the Super Bowl rolled into one and multiplied 10x) indicates that India will end fiscal 2015 with a GDP growth rate of 7.5 per cent. This is extraordinary even discounting some statistical jugglery. Importantly broader economic indicators like fiscal and current account deficits have compressed to within targets.

In addition, inflation is coming under control aided by the tailwind of lower global oil and commodity prices. Critical economic reforms are being rolled out to enhance ease of doing business and to bring consistency and predictability to government policies. Steadfastly the government has sent a message of a firm hand on the governance till and set a medium-term forecast of key economic targets for the next three years. Analysts and pundits are excitedly talking about a double-digit growth rate being within reach.

A double-digit GDP growth rate is moot. There is no denying though that decisive leadership and clear policy-making would make India an exciting potential. Nearly 50 per cent of its 1.3 billion people are less than 25 years of age. This generation hooked to the 24x7 world of media connectivity is impatient for growth. It has no appetite for wooly-headed socialist redistributive economic policies. The country needs massive investments in infrastructure and manufacturing; the second has been identified as top priority. The animal instincts of Indian entrepreneurship are ready to be unleashed.

This is indeed well-timed. As the dragon slows, the elephant is breaking into a trot. The world will welcome that.