The New Era of a Shining India
“A bright spot in a cloudy global horizon” is the description that the International Monetary Fund uses as a reference to India, a country that only a quarter of a century ago was at the brink of a global default. Yet, India stands today as a leading model in the world’s growth race. After a number of statistical revisions, the second most populated nation after giant China has an economic growth predicted to reach 7.2 pc in 2015 and 7.6 pc in the following year, and is thought to surpass the economics of Japan and Germany combined by the time we reach 2019.
According to The Organisation of Economic Development, India is considered to be the world’s fastest economy in 2016, when it could hit the level of 8pc, bringing it near the heights of 2004 and 2012, when the average output was calculated at 8.2pc a year.
The fall of inflation, together with the election of a new government in May 2014 has brought India global attention, as the new Prime Minister’s Narendra Modi politics are oriented towards the cut of red tape, graft elimination and foreign investors being attracted to Indian markets.
The new Government is determined to seek for investment and to improve the credibility of Indian economy, in order to gain jobs and higher living standards for the population. This is, by far, Indian’s biggest challenge, to remove poverty and a strong job creation, up to 12 million a year. In order to achieve this, the government has plans to boost the country’s infrastructure, commit to deficit reduction and provide and independent framework for the central bank. Also, it is crucial to find solutions to the food issue and to train a new generation of Indian people for a different kind of jobs, as the sector of job creation has been lacking in India’s recent history.
A young population is a new opportunity but can also, become a threat, according to Subir Gokarn, the research director of the Brookings Institute in India. The country’s fourth largest state, Uttar Pradesh, has a population of the size of Brasil and GDP per capita similar to that of Kenya. India’s “demographic dividend” could add two percentage points a year to the country’s per capita growth, but would also require the economy to generate 100 million jobs in the next decade. Yet, demography is believed to be the greatest advantage that the country owns over China, who has an ageing trend.
In terms of poverty, statistics show that the country’s growth over the past two decades has already pulled 200m Indians out of poverty. It is the 2000s the moment of time when India began to boom and the country’s ascending path, together with the Government’s balanced plans, although it is not easy to set up reforms, makes one believe that India will soon be back on the world’s international map. This is a special moment for India and one should definitely seize it.