It is the nature of financial market expectations to amplify the impact of both good and bad news. In early 2003 the investor mood in India was excessively depressed, despite the record-low levels of interest rates and some early tentative signs of improving investment activity.

The ride on the equity markets since then has been nothing short of awesome, with the bull run digesting outsized corrections along the way. Now, the current mayhem in global financial markets once again raises questions about the sustainability of India’s economic growth.

The year 2003 was when the structural drivers of India’s economic rise began to receive greater coverage and acceptability. A combination of structural factors — decline in interest rates, favourable demographic trends, faster growth in household incomes and the rise of the middle class not shy to spend — have contributed to the consumption boom.

A restructured corporate sector after the sting that crippled it in late nineties, entrepreneurial ability, increased economic integration with the world and a greater ability of banks to lend have all played a role in establishing a firm base for higher sustainable economic growth.

The recent cyclical monetary tightening will only moderate—not derail —the strength in spending. And the impact of higher interest rates will not kill the investment boom currently under way. Using policy to navigate the economy towards a sustainable path of growth with low inflation is a part and parcel of managing business cycles.

The concept of managing demand is almost alien to our policymakers, as we have largely been nation of shortages. This is gradually changing and will undergo an even more rapid metamorphosis.

These factors were favourably affecting growth earlier too. However, 2003 was when the positive domestic structural trends blended with the beginning of an easier global liquidity cycle and the related increase in global risk appetite to create the building blocks of impressive economic growth, record increase in corporate earnings, increased capital inflows into India and greater acknowledgment that “our time has come, finally”. The spark needed to jumpstart demand was delivered in the form of an excellent monsoon in 2003. There has been no looking back ever since.

Tectonic structural shifts, as those occurring in India, generally continue over several years and their impact can be felt for even longer as policymakers unlock the nation’s economic potential. Still, there are daunting tasks ahead, especially the tardy pace of improving infrastructure, poverty, a stagnant agriculture sector, patchy delivery of quality education and the shortage of employable workers.

I’m often asked about the greatest risk to the emerging India story. That risk is domestic — not external — and lies almost entirely with our politicians and policymakers. “Indian planning” is an oxymoron. There is no dearth of smart people coming up with smart ideas, but there is a severe paucity of relevant talent that can effectively implement those ideas. Too bad we cannot outsource the limited work done by most of our politicians.

Rajiv Malik is Executive Director, JP Morgan Chase Bank, Singapore