New Delhi, India
There was a big round of cheer from people in the industry and the corporate as well, when the economic data pertaining to the GDP was released by government agencies. According to sources, the Indian economy is set for a surge and in the next decade, probably even by 2025, India is expected to double the size of the GDP to USD 5 trillion The Real GVA expansion for Q4FY18 congregated a respectable pace and clocked 7.6% YoY (higher than anticipated 7.2%) versus 6.6% in previous quarter. The upswing was strongly aided by low base with the government spending and agriculture doing better than expected although the impetus in private sector GVA was just a tad weak. However, on the GDP front private consumption and exports were mostly weak. But encouragingly, GFCF (Gross Fixed Capital Formation) maintained its improving trend, perhaps reflecting the strong pace of government spending.
Going ahead, with the base effect being on the favorable side, and with the broader economy reviving from aftershocks of the demonetization and the bumpy implementation of the GST, reasonable acceleration is expected as far as the GVA growth in FY19 is concerned. Although being in its blossoming stages, sequential pick-up in investment rate (GFCF to GDP) for the quarter to 29.1% versus 28.2% in 3QFY18 is an encouraging sign in itself. So far, as mentioned earlier this keeps up a correspondence largely to push from the public sector and possibly some momentum in housing sector as well.
India, in order to maintain a tag in the long run and achieve an incredible feat, needs to work consistently on the growth of rural India, needs to focus on core requirements for middle class, needs to take steps to eradicate malnutrition and last but not the least work towards strengthening an important pillar of the country’s destiny i.e Woman Empowerment.
The government undoubtedly has floated several schemes – Jan Dhan Yojana, Fasal Bima Yojana, Suraksha Bima Yojna, Garib Kalyan Yojna for the upliftment of rural economy, but due to the corruption at every level, these schemes are not implemented in the manner they should be. As a result, the outcome is not at all in line with the expectations of anyone. Secondly, the pace of economic development is largely dependent on the middle class for any country. Hence one needs to focus on improvising the quality of life and their lifestyle so that major part of the population can contribute to the real economic growth. Thirdly, around 38% of Indian children between the age group of 0-5 are malnourished to such an extent that there is a definite permanent damage to their physical and mental capabilities which is irreversible. Hence, the government needs to focus on this issue sooner rather than later.
Lastly, In India only 27% of the women are working and there are clear evidences of further decline in the said percentage. As per a study, out of 188 countries across the world in terms of working women population, India stands amongst the last few at the 170th rank. Due to improper working environment in offices, Indian women are not able to work properly.
Going forward, IMD’s forecast of a normal monsoon and the governments focus on housing and infrastructure may boost our economy further in the coming quarters and even the corporate recovery cycle which has just shown first signs of picking up. With a proper strategy in place to deal with the looming threats of global trade wars and rising oil prices, India can achieve and sustain a double-digit growth in the upcoming quarters.