The Robust Indian economy will expand beyond forecast
By Srimal Fernando, Global Editor
In the last few decades, India, the economic giant of South Asia with a population of more than a billion people, has been known for its fast ride onwards on the road of global economy. On May 16th 2014 India, the home to the world’s largest democracy, chose to elect 543 members to the 16th Loksabha elections.
The Barathiya Janata Party (BJP) led National Democratic Alliance (NDA) emerged victorious, winning over 330 Loksbha seats. The Bombay Stock Exchange (BSE) Sensex lifted to a record figure of 24,121.74 points as the Narendra Modi led National Democratic Alliance (NDA) won the historic elections in India.
Modi, the Prime Minister elect said in his victory speech “India has won! This is India’s victory”. “Achche din aane waale hain (The good days are ahead). The Barathiya Janata Party (BJP) has been vocal and had clearly stated that it wants to improve relations with India’s neighbors. Eight South Asian heads of states were invited to the new Indian Prime Minister’s swearing-in ceremony. Pakistan Prime Minister Nawaz Sharif’s participation added a new dimension to the India –Pakistan relations. It was a historic moment where the time has grown to heal the wounds between the two nuclear armed neighbors who fought three wars since Independence from Britain in 1947. Fostering relations with India’s immediate neighborhood will bring stability, lessen tension and improve the overall economic situation across South Asia. Today India is under the wise leadership of Prime Minister Narendra Modi and will experience great progress and development.
The past several decades has seen the resource-rich Indian economy changing, developing at a fast pace and enhancing the financial status among the world’s most powerful nations. The real Gross Domestic Product (GDP) growth rates of India has shifted substantially over time to an all time high of 9.6 percent in 2006 -2007 to 6.7 percent in 2011 -2012 periods withstanding the global financial crisis. Government incentives are being prepared for foreign investors to establish businesses in the country to boost exports. Foreign Direct Investment (FDI) is a core pillar to improve the business and investment environment in India. India has emerged as South Asia’s most attractive country for investment. Countries Foreign Direct Investment, (FDI) rose to 20.4 billion American dollars from April 2013 to February 2014. With the political stability, economic reforms, and improvement in domestic consumption, the economy is forecasted to grow at an average of over 4.9 percent for this year. The United Arab Emirates, China, United States, Japan, European Union (EU) and Saudi Arabia are some of the largest trading partners of India .With Sino-Indian trade reaching USD 49.5 billion China has become one of India's largest trading partners. Trade deficit measure for the country is expected to be on one digit figure of the total GDP this year due to the outflow of domestic currency and imports exceeding its exports. According to the Reserve Bank of India (RBI) 4.1 percent fiscal deficit is predicted for this year.
More than 17 percent of the GDP and fifty percent of the country's labour force is dependent on agriculture. India was the largest milk producer in the world accounting for 132.4 million tons in 2012 – 2013 according to the National Dairy Development Board (NDDB). After agriculture a large section of the Indian labour force is directly employed in the textile manufacturing industry. It is estimated that spinning, weaving and other sectors of the textile manufacturing industry of India is worth 75 billon American dollars annually. With the rapidly growing middle class in India thousands of retail shops, stores, out of trucks, on mobile motorcycles located in every village, town or state across India are doing business. There can be no doubt the 500 billion American dollar worth retail industry is an emerging market in the country. The global appeal for the nation's largest metro economies such as Delhi and Mumbai appear to be very much the commercial capitals of the country. The multi-ethnic National Capital Territory of Delhi stands as the political, cultural and economic center of India. Trade, public, finance, professional services, and various community, personal, and social services features shape economic growth of the National Capital Territory of Delhi. Today Mumbai, one of the largest metropolitan areas in the country, has emerged a distribution hub and a financial center in the country .
The growth momentum and economic outlook in major states of Punjab also known as "India's bread-basket", Gujarat major industrial hub, Maharashtra the most industrialized state in the country, Tamil Nadu the second most industrialised state next to Maharashtra, Uttar Pradesh the 'IT-Hub' of North India, and the third largest economy in the country and West Bengal are becoming giant economic powerhouses in India. India is currently undergoing a structural adjustment progamme with a view to boost productivity in all sectors of the economy. Modernizing the country's infrastructure through multibillion-dollar investment projects is already showing results. The country’s railway network has formed part of India’s success story and today it remains committed to play a vital role as the story unfolds. The Indian railway network, with an estimated 115,000 kilometer railway line network is one of the world’s largest rail networks. It connects to 7600 stations across India, operates high speed and conventional railway systems and metros and other guided transportation systems. Having embarked on a vigorous restructuring exercise to enhance the efficiency and improve the quality of transport services, expressways are being built in many States across the country. The 93 kilometer six lane Mumbai-Pune Expressway, the 150 kilometer six lane Mumbai to Nashik expressway, the 165 kilometer 6 lane Yamuna expressway connecting Greater Noida with Agra are some of the backbone of the expressway networks in the country. India, surrounded on three sides by the sea connects to thirteen major shipping ports along the 7600 kilometers coastline. Among them Mumbai, Jawaharlal Nehru Port Trust (JNPT), Kandla, Kolkata Visakhapatnam and Madras Port the second biggest port in South Asia are important maritime centers strategically located between Asia and Europe.
Tourism in India is experiencing sustainable growth for the last three decades. The sector is steadily gaining ground and is emerging as a major foreign exchange earner for the country. The Indira Gandhi International Airport, Chhatrapati Shivaji International Airport, Chennai International Airport are some of the most important aviation hubs in India and major aviation gateways to European, Middle Eastern and the Far Eastern aviation lines. The small-medium enterprises, multi-national companies (MNCs) play a key role to accelerate the integration of the country’s cooperate sector into the international systems and to attract foreign direct investments to India. Multi-million dollar Indian companies such as Reliance Industries, Wipro, Sun Pharma, HCL Technologies, AVB Group, Bharti Airtel, Adani Enterprises Jindal Group, Essar Group are poised to play a key role in country’s future development process. Nowadays the country is responding to internal and external challenges with great creativity and initiative and endeavors to enhance new patterns of global cooperation and developing a sustainable economic partnership to build a better Indian society. India’s economy will remain robust and will expands more than forecasted, despite facts on GDP, inflation, trade, business, and other data and analysis on its economy.