Prime Minister Narendra Modi led BJP Government since conquering the national stage has brought bright economic scenario for the nation. Where 2014 brought a halt to the economies down surge and Retail Commodity prices going down; 2015 is all set to see a boom. A year of high FII, GDP growth at more than 6%, controlled Inflation and a thought of India possibility becoming Asia’s most growing market by 2016. The question is simple “for how long the Modi-led Governments Resilience will hold and keep the economy uprooted as it is looking like.
Indian Economy 2015 looks bright and going with the status quo the economy will surely see an upsurge in the following fiscal. With average age of the nation hovering around 25 and rich demographic dividend stars are bright for the nation as compared to the developing world.
Campaigns like “Make in India” will help the nation move from an agricultural based economy to a balanced one between agriculture and manufacturing. Excessive dependency on agriculture has always taken the country back at times of floods or drought. In Figures; GDP dependency on agriculture has slipped down from 25% to 18% in last decade. With the advancement of manufacturing sector we will see the Global Markets depending on Indian Products.
2007 recession will surely contradict my previous points; however India has an advantage over the other Global Developed countries. India’s fastly paced growing domestic markets provide immense potential for the country to grow. Exports in the nation account for a mere 25 % as compared to already established manufacturing based countries where exports account for more than 50-60% of GDP. So a balanced Agriculture and manufacturing market will safeguard India from all Global Turbulence on very large scales. What will be worth seeing what Mr. Narendra Modi’s cabinet holds in its kitty for Agricultural Developments?
Extrapolating the same we expect a period of lower inflation and a GDP growth around 6.4% in 2015. Lower inflation will allow the room for policy making in the country and will give space for Reserve Bank of India to play its rate cards. FDI is one hot pot Mr. Modi has focused since his inception into the Prime Minister seat and 2015 is likely to bring investments in large stature from Global markets. However, key policy changes in terms of foreign direct investment will be seen in few sectors like Defence and aviation as it may raise a concern for national security. Policy making is one point I will not like to throw much light on as indian policy making has always been a step forward and two sideways.
The wave of rate changes was cleared by the Reserve bank Governor on 2/12/2014, when he left all the rates unchanged citing external situation and risk to inflation in coming summers.
By: Manu Arora