India’s elephantine economic jump

India’s elephantine economic jump

- in Special Post

India is on the fast track to become the engine of world economy. Thanks to positive policies and politics of performance of the current dispensation under the dynamic leadership of Prime Minister Narendra Modi, India’s economic empowerment has started drawing the global attention in a critical manner. It is no mean achievement that India has emerged as the world’s sixth largest economy in 2017 surpassing France. It is likely to go past the United Kingdom, which is at the fifth position. The assessment is based on the analysis of data compiled by the World Bank. In 2017, India became the sixth largest economy with gross domestic product (GDP) of US $2.59 trillion, relegating France to the seventh position. Similarly, the United Kingdom, which is facing Brexit blues, had a GDP of US $2.62 trillion, which is about US $25 billion more than that of India. The US is the world’s largest economy with a size of US $19.39 trillion, followed by China (US $12.23 trillion) at the second place. Japan with US $4.87 trillion and Germany US $3.67 trillion are at the third and fourth places respectively.

Indian government has taken various reform measures to improve the ease of doing business in recent years. These include implementation of the Goods and Services Tax and the Insolvency and Bankruptcy Code (IBC). The flow of foreign direct investment (FDI) has increased manifold in the past four years. There is a significant improvement in domestic investment as well. India’s economy grew at a seven-quarter high of 7.7 per cent in three months ended March 2018, helped by higher government spending and investment. As per the IMF’s World Economic Outlook released in April this year, the size of the Indian economy was pegged at US $ 2.61 trillion, ahead of France with a GDP of US $2.58 trillion. The International Monetary Fund (IMF) pegged the size of the UK’s economy at US $2.62 trillion, slightly bigger than India.

However, India’s real challenge lies in ensuring that the people have access to the best of facilities in general and the poor in particular. All said and done, India remains the home to the world’s largest lot of poor and malnourished people, mostly from marginalised sections of the society. No concrete mechanism has so far been evolved which may put India in the bracket of the countries which provide the best of health and education facility to its people. The gap between the haves and have-nots continues to widen. Given the vision of Prime Minister Narendra Modi and his team, which is primarily based on the agenda of inclusive development, one hopes that the current dispensation goes extra miles in making the best of facilities available to the weakest among us so that we are able to compete with France and other thriving economies of the world.

Union Minister Arun Jaitley has rightly exuded confidence that India will pip Great Britain to become the fifth largest economy in the world next year if economic expansion continues at the projected rate. However, rising international crude oil prices and the global trade war would throw up challenges going forward. If we keep growing at the rate which is being projected, it is likely that next year we will be the fifth largest economy ahead of Great Britain. “Being the fastest growing economy for the last four years, we can look at the next decade as one of economic expansion. We have already seen a significant move up in India’s ranking in the ease of doing business and as a preferred investment destination. Today we stand to be tested in the midst of a global challenge thrown up on account of the international crude oil prices and the trade war,” he said.

The NDA government, under Prime Minister Narendra Modi, has ensured that rural India and the less privileged get the first right on resources and if this, along with increased expenditure, continues for the next decade the impact on India’s rural poor would be significant. This benefits all irrespective of religion, caste or community. The Congress provided India’s poor with slogan. Prime Minister Modi has given them resources. This will ensure faster growth and lead to a faster depletion in the poverty. The Congress party in 1970s and 1980s followed the model of ‘populist slogans’ rather than ‘sound policy and actual expenditure for the welfare of the poor.’ The 1971’s ‘Garibi Hatao’ model was one of redistributions of poverty rather than the generation of wealth and resources. The result of this misguided approach was that the lives of the poor did not move up significantly.

On the contrary, the present Prime Minister is a man of many words and many more actions. He announces stiff targets and programmes which at first sight appear to be difficult, if not impossible. He follows it up with the actual implementation and delivers the promise. Needless to say that the NDA government’s programmes for rural India have the potential to lead to increased incomes, increased social security, improved quality of life, higher income from agriculture and better healthcare. Ever since the present government took over, it has been working to translate the advantages of faster growth to rural India as well as to bring a significant section of people into the neo-middle class and bring people out of poverty. It is, however, too early to conclude that the poor among us will get their equitable share in national resources, opportunities, facilities and challenges irrespective of their caste and religion.

(The writer is an independent socio-political and economic analyst. The views expressed are his personal)

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