GREAT EXPECTATIONS ABOUT INDIA'S GDP GROWTH

Gross Domestic  Product or GDP is the sum total value of goods and services produced within the country, which is  generally used to compare with the GDP of other countries. It may be noted here that despite other important indicators like HDI, education,health, nutrition poverty index etc for general comparisons GDP is widel used. According to Economic Survey 2023-24  Indian economy is both on a strong wicket and stable footing demonstrating resilience in GDP growth despite various emerging geopolitical conflicts and tensions.India has consolidated it's post covid recovery with proper policy mix of  measures including fiscal and monetary policies which ensured both economic and financial stability. It has been observed that while India's GDP growth had averaged 6.6% ,since 2010 till the pandemic, employment growth remained under 2.0% during the same period. A look at the GDP estimate made by various agencies including National Statistical Office,Finance Ministry , Reserve Bank of India and other national and international agencies showed the following outcomes.  According to World bank  GDP growth for India is estimated to be 7 % for the year 2024-25  from 6.6 % in 2023-24. In fact World Bank growth projections are in line with that of the IMF and Asian Development Bank (ADB).Indian economy currently remains as the fifth largest economy of the world after USA, China Japan and Germany. To achieve 7% growth world Bank made following assumptions - trade should increase innovation,productivity of workers, ability of households should also increase faster productivity.International Monetary Fund (IMF) has recently made several positive projections about Indian economy. GDP forecast for 2024-25 increased from 6.8% to 7% which is due to the anticipated increase in private consumption expenditure especially in rural areas. According to IMF's Gita Gopinath India must create 60 to 148 million jobs by 2030 to contain population growth. She also emphasised the need for labour codes ,educational reform, private investment ,tax changes and tariff reduction in this context.According to K V Subrahmanyam of IMF The growth forecast for emerging markets and developing economies (EMDEs) has been revised upward and this increase is powered by stronger activity in Asia region particularly in China and India reflecting   carry over from upward revisions to growth in 2023 and  improved prospects for private consumption particularly in rural areas.OECD also increased GDP projections for India by 40 basis points to 6.6% for 2024-25,assuming buoyant public investment, improved business confidence, domestic demand driven growth by gross capital formation particularly in public sector etc.According to RBI Governor National Statistical Office placed real GDP growth at 8.2% for 2023-24. During 2024-25 so far domestic economic activities maintained resilience, and manufacturing activity gathers momentum and services sector maintained buoyancy. As a result RBI revised GDP growth projection agencies for 2024-25 are State Bank of  India 8.0% ,Fitch 7.0% ,Standard Chartered 7.0% , Moodys 7.2%.As per National Statistical Office (NSO) India's GDP for the first quarter (April-June) Q1FY25 hit  low of 6.7 % compared to 8.2%  for the same period last year .On the otherhand Gross Value Added ( value added by the producers to goods and services. for  Q1 was  8.3% in  Fy 24 ,6.3% in Q4 Fy 24 and 6.4% in Q1 Fy 25. Agriculture growth in the corresponding period was 3.7% , 0.6 % and 2.9%,Industry 6.7% ,8.9% and 8.3% ,Services recorded 10.7 % in Q1 Fy 24,6.7% Q4 FY 24 and 6.1% Q1 FY 25 respectively.Decline in service sector growth is largely attributed to decrease in sectors like trade,transport,hotels communication etc which is relatively labour intensive. Similarly as far as labour intensive apparel,leather and footwear exports are concerned we are losing our ground to countries like Vietnam and Bangladesh despite disruptions in such exports from China. Infrastructure development has been a major driver of GDP growth enabling India to become a developed country by 2047.Unfortunately more than 10 bridges have during construction or afterwards. Despite time delays and cost runs building our experience and expertise in project management is crucial to continue our high growth trajectory further ahead. 

 

 Our growth experience has shown that from a fragile five economy India has emerged currently as the fifth largest economy globally. If Indian economy grows at 9-10% over next  2-3 decades it can become a developed economy by 2047 and obviously we need to improve our learning outcomes, health outcomes and nutritional standards in a big way.According  to Amitab Kanth  in  the next three years  we will overtake Japan and Germany to  become the 3rd largest economy in the world transforming India a resilient power house of  growth.  According to K V Subrahmanyam's  study-  India @ 100 reaching the developed country status is not difficult for India and the potential is to realise US$ 26 trillion economy by 2047, and India would remain as the fastest growing large economy in the medium term. The positive points narrated are- India as global information technology and services hub,multiplier effect of digitalisation,digital public infrastructure  and its adoption by people and support to financial inclusion and new businesses opportunities, fuelling the credit gap to fuel growth, reaping demographic dividend, building the infrastructure of the future and transition to  sustainable energy. Citing the example of Japan which grew during the period 1956 to 1973 with an average annual real growth rate of 9.2% which led to  miraculous changes in Japanese economy. Author recalls similar impulses in  India's current scenario for growth and development. Moreover youth of India is expected to drive consumption and economic growth. Artificial Intelligence AI, block chain and quantum computing are expected to revitalize  trading and market efficiency in the capital market .Equity market capitalisation is estimated to reach $ 50 trillion economy by 2047.If investors, stock exchanges and regulators will all embrace AI and machine learning market regulators can  become more transparent devoid of undesirable activities as suspected currently. 

     IN SHORT  THE POSSIBILITY TO ATTAIN 3RD LARGEST AND EVENTUALLY 2ND LARGEST GLOBAL POSITION  IN TERMS OF GDP IS VERY MUCH STRONG FOR INDIA IN THE COMING DECADES.HOWEVER PERCOLATION OF THE FRUITS OF DEVELOPMENT TO THE BOTTOM IS DIFFICULT BECAUSE OF MORE TECHNOLOGY ORIENTED AND  LABOUR SHORT GROWTH. OBVIOUSLY ADEQUATE SAFETY NETS SHOULD BE PROVIDED. POLICY MAKERS SHOULD BE MORE VIGILANT AND STRONG NOT ONLY TO PROTECT THE VULNERABLE SECTIONS BUT ALSO TO REGULATE EFFICIENTLY FINANCIAL AND CAPITAL MARKETS AND DIFFERENT AREAS OF ECONOMY AND DEVELOPMENT . THE SPIRIT OF  THIRUVONAM AND RULE OF LEGENDARY KING MAHABALI COULD INSPIRE  THE POLICY MAKERS IN TAKING APPROPRIATE DECISIONS. 

"WISH YOU VERY HAPPY AND PROSPEROUS ONAM"