A report by Japanese financial services firm Nomura has predicted that India’s GDP growth for January- March quarter will be 7.7 percent up from 7.2 percent in the previous quarter. According to the report, “despite the moderation in March, industrial production growth averaged 6.2 per cent in the January-March period, up from 5.9 per cent in Q4 (October-December)”, suggesting improvement in economic activities in core industries like steel, oil, cement, coal etc.
Nomura financial services is a subsidiary of Nomura Group which enjoys considerable reputation in the market. It became famous for acquiring global financial services giant Lehman Brothers after the 2007-2008 financial crisis in which Lehman brothers had gone bankrupt. The report, while suggesting a boom in private consumption in the near future, gave a note of caution on rising oil prices and tight fiscal policy in future, saying “While we remain optimistic on the near-term growth outlook, we expect the adverse impacts of rising oil prices and tighter financial conditions to slow growth further out.”
A few days earlier, International Monetary Fund (IMF) in its Regional Economic Outlook Report declared India as the fastest growing major economy in the Asia-Pacific region. It pegged India’s GDP growth at 7.4% this financial year and 7.8% for the upcoming one. According to the IMF, “India’s recovery is expected to be underpinned by a rebound from transitory shocks – like the currency exchange initiative and the rollout of the Goods and Services Tax – as well as robust private consumption. Medium-term growth prospects remain positive, benefiting from key structural reforms”. It has credited PM Modi’s economic reforms like GST, Insolvency and Bankruptcy Code (IBC) as well as the privatization of loss making public sector undertakings like Air India and Hindustan Machine Tools (HMT). Air India was one of the largest loss making government units held by the government, but previous governments were reluctant to privatize the unit. The losses were directly a burden on honest, taxpaying citizens. According to Economic Survey, GST led to 50% increase in indirect taxpayer base. These extra funds could be used by the government to provide public utilities like health and education to millions of poor Indians.
Another report by Centre for International Development (CID) of Harvard University mentioned that countries like India and Vietnam will be growing the fastest in coming days because they have diversified their economies into many complex sectors. According to the report “India tops the list as the fastest growing country for the coming decade, at 7.9 per cent annually, in the economic complexity growth projections. India has made inroads in diversifying its export base to include more complex sectors, such as chemicals, vehicles, and certain electronics”.
Indian economy was slowing down in the last years of the UPA government (2012-2014), but the economy picked up pace again when the new BJP government came with a full majority of its own in the Lok Sabha. The government undertook a series of reforms in taxation laws, labor market laws and education sector. The fruits of these reforms have started showing up with India projected as the fastest growing major economy for the next decade in every government and non-government study.
As report after report is concluding that the Indian economy as well as the GDP is growing at fastest rate in comparison to any other major economy, the delusional claims by opposition leaders like Rahul Gandhi that the economy is on a downward path seem unfounded. It also shows the limited understanding of business and economy on part of the opposition, with them trying to create a myth of recession and unemployment among the Indian public.