The latest to join the herd in projecting India being the fastest-growing major economy in 2021 is global financial analysis firm Nomura which predicted that Indian Economy will grow at the pace of 9.9 per cent in 2021, eclipsing China (9 per cent) and Singapore (7.5 per cent).
“We project GDP growth to remain in negative territory in Q1-2021 (- 1.2 per cent), pick up to 32.4 per cent in Q2 on base effects, before easing to 10.2 per cent in Q3 and 4.6 per cent in Q4. Overall, we expect GDP growth to average 9.9 per cent in 2021 versus -7.1 per cent in 2020, and 11.9 per cent in FY22 (year ending March 2022) versus -8.2 per cent in FY21,” wrote Sonal Varma, the Managing Director and Chief India Economist at Nomura in a December 8 report titled ‘Asia 2021 Outlook’, co-authored by Aurodeep Nandi.
Before Nomura, even the International Monetary Fund (IMF), in its World Economic Outlook 2020, projected that India will grow at 8.8 per cent and will become the fastest growing economy in the world. On the other hand, China is expected to grow at 8.2 per cent.
The Finance Ministry also said that even if India grows at a negative rate in the ongoing year, it will be the fastest-growing economy in the next year because many sectors are doing very well while others will pick up once the lockdown is completely lifted.
“Even if it is going to be in the negative or near zero this time, the next year will very clearly have India as one of the fastest-growing economies. We are looking at that kind of a trajectory. Indicators show that primary sector, related sectors of agriculture, rural India are doing well,” said Finance Minister Nirmala Sitharama on October 27.
Amid the pandemic, India carved out a new strategy for growth and named it ‘Aatmanirbhar Bharat’. Under Aatmanirbhar Bharat campaign, the Modi government is pushing towards privatization, liberalization, and promotion of Indian firms and local businesses. The government made it very clear that public sector companies will exist only in strategic sectors, that too in not more than four or five sectors.
Moreover, foreign companies will be treated in the same manner as they treat Indian companies, and countries like China will not be allowed to run huge trade deficits. Therefore, the huge amount of foreign reserves which used to go outside the country will now be accumulated and invested in boosting and improving the infrastructure of the nation.
For the first time, the government decided to incentivize the manufacturing sector under the Production Linked Incentive (PLI) scheme. This is a significant mindset change on the part of the government, which, so far, was used to subsidize and incentivize only the agrarian sector.
With the reforms carried out in the last few years, the Indian economy will definitely witness golden days in the near future.