Story Of The Week

Acche Din aa Rahe Hai…

With the improved political outlook under the Modi led BJP government that has come to power with substantial majority and plans to take a host of reforms, Acche din for India and its economy are not very far. This is what most of the reports and economists have to say.

As per the OECD report, the Indian economy is expected to grow by 6.4 percent next year as compared to 5.9 percent estimated two months back in September. The country could now be within striking distance of China in terms of pace of growth.

So has the Modi led BJP government really made efforts towards it or is it simply effective positioning of INDIA done by the government as part of their marketing strategy??

[1]

acche

Well the OECD forecast has also lowered target for the global economy and having a positive outlook for India certainly means the reasons are specific to the country. Since taking charge, the Modi government has unveiled several policy changes such as deregulating diesel prices, linking gas prices to global benchmarks, amendment to labor policies, steps to end inspector raj and cutting red tape for businesses. As the government plans to bring in many other changes, even the markets are responding positively to them.

Research analysts are already describing India as being on the top among BRICs and as the “best house” in a bad neighbourhood.

In fact, Industry baron, Deepak Parekh in his interview talked about how suitable the conditions are now for India to achieve a 10 percent GDP growth rate. Never has India witnessed a bout of stable political situation, falling oil prices and rising stock markets. Hence, this is the right time to lay the foundation for reaching the 10 percent growth rate mark leaving the dragon behind to become the fastest growing economy in the world. [2]

All said and done, India still has a long way to go. OECD also called for subsidy reforms as the country needs to continue fiscal consolidation. But while doing so, it should also improve its quality and rebalance expenditures away from subsidies toward public investments.  Even with such a positive outlook, the central bank cannot afford to digress from the issue of inflation. Monetary policy still can’t relent in the fight against inflation.[3] It’s still early days to make any comparison on the GDP growth of India and China considering that the economies have very different issues at the moment to handle. The OECD Economic outlook reports a decline in the growth of China, Brazil and Russia.

It’s time we make up for what the economy has lost in the recent years….

[1] Source: http://www.economictimes.indiatimes.com/photo/45064277.cms

[2] Soucre: http://economictimes.indiatimes.com/markets/stocks/news/exceptionally-good-conditions-in-place-for-10-growth-deepak-parekh/articleshow/45078644.cms

[3] Souce: http://articles.economictimes.indiatimes.com/2014-11-07/news/55871554_1_growth-forecast-india-inc-oecd-economic-outlook

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