India recently lost out on the distinction of being the world’s fastest-growing major economy after it grew at 5.8%, which is slower than the 6.4% growth registered by China. However, economist Akash Jindal says “India is doing much better than a lot of other countries and the slowdown in growth rates are a worldwide phenomenon”.
An Indian Central Statistics Office report released on 31 May revealed that for January-March 2018-19, India’s growth rate stood at 5.8%. It was slower than China’s 6.4% in the same period. The report further mentioned that GDP growth during the 2018-19 fiscal year stood at 6.8%, lower than 7.2% in the previous financial year.
According to Delhi-based economist Akash Jindal, although due to low performance in agriculture and manufacturing sectors, the growth rates were pinned down, but the Indian economy under the newly formed Narendra Modi government is expected to flourish.
“India is doing much better than some other countries in spite of the global recession. For the GDP growth rate, it would be unfair to single out India. In the entire global economy, the GDP growth is only being projected around 3.3-3.4%”, Jindal said. “I agree to the fact that Indian GDP growth has also gone down but still, the growth is almost double of most other countries”.
David M. Solomon, Goldman Sachs’ chief executive officer, said that his company expects India’s gross domestic product (GDP) growth rate to cross 7.5% under the newly formed Indian government if the pace of economic reforms is increased. “If you think about the continuing digitisation of the economy in India, obviously that’s going to create many opportunities”, the Economic Times quoted Solomon as saying.
Agreeing with Solomon’s statements, Jindal said: “I feel there are tangible good signs after the new government was sworn in. The global investors are exhibiting a lot of confidence in Narendra Modi’s government. He has built an image for himself as a person who would take firm decisions to improve trade”.
“The fact that India has become the sixth largest economy in the world only vindicates the successes of his economic policy implementation. Modi’s vision of digitising the economy would surely help India again pick up their growth rate above China in the days to come”, he added.
Another Delhi-based economist, Tarun Kumar, said that the slump in the growth rate is not a big worrying sign and could be corrected if the Reserve Bank of India (RBI), the central bank, takes risks in favour of growth at a time when inflation is low.
“It is due to a meagre decline in private consumption and weak pick-up in investment that the GDP growth has slowed down in 2018-19. However, the Monetary Policy Committee of RBI deciding to cut the repo rate by 25 basis points to 5.75% should lead to an increase in investment and lending. Overall I would hope that the new Narendra Modi led government would take risks in favour of growth in the coming 5 years”. SPUTNIK