India’s economy is set to shrug off the jitters of a global pandemic as the forecasts from leading world bodies start to look increasingly promising and optimistic. According to a report by the United Nations, India stood out as the bright spot for FDI in the year 2020 that was marred by a Coronavirus pandemic.
The report titled ‘Foreign Direct Investment Trends And Outlook In Asia And The Pacific 2020/2021’, and compiled by United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) states that India accounted for 77 per cent of the total inflows in the South and South-West Asia subregion and received USD 51 billion in 2019, up by 20 per cent from the previous year.
Just to give a little perspective to the reader about the aforementioned numbers — the total inward FDI flows to South and South-West Asia decreased by over 2 per cent in 2019, from USD 67 billion in 2018 to USD 66 billion in 2019 but India remained rock steady and on the contrary, made precious gains.
The resilience of the Indian economy, in the long run, could help the country beat the blues of the COVID-19 pandemic, much quicker than anticipated. Unlike China, India, and its nascent financial markets still stand out and are seemingly the hotspots where investors are looking to punt their fortunes.
The report further states that India’s fast-growing telecom and digital space, in particular, could see a faster rebound as global venture capital firms and technology companies continue to show interest in the country’s market through acquisitions.
While the CCP is running from pillar to post to bail out the companies, India does not even have to go anywhere as foreign heavyweight companies have swooped in to relieve the distressed firms.
The scale of the money pouring in the distressed financial Indian market can be gauged by the fact that according to Researcher Venture Intelligence estimates, funds to the tune of $1.5 billion have already been umped in distressed Indian assets this year, which is 55% more than through all of 2019.
Reported previously by TFI, Global financial analysis firm Nomura has even predicted that the 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).
Furthermore, 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. When compared to India, China is expected to grow only at 8.2 per cent.
India and its Union government were proactive in arresting the slide from the beginning. As soon as the pandemic hit the Indian shores, the government-induced an immediate lockdown and Prime Minister Narendra Modi went into overdrive and announced a massive ₹20 lakh crore package, roughly 10 per cent of India’s Gross Domestic Product (GDP) to give immediate relief against the slowdown induced by the Pandemic and the related lockdowns.
Out of the ₹ 20 lakh crore package, ₹ 8.04 lakh crore has already been injected into the system in the form of additional liquidity through various means across February, March and April. Add to it, the ₹ 1.7 lakh crore relief package that Union Finance Minister Nirmala Sitharaman had announced on March 27, shortly after the imposition of a nationwide lockdown.
Making it very clear to India Inc. that the government was willing to subsidize not just agriculture but industries too, the Modi government in November announced a Production Linked Subsidy (PLI) scheme for 10 more labour-intensive sectors. The call of Aatmanirbhar Bharat has been the cornerstone of the NDA government’s post-Corona economy resuscitation strategy.
The opposition which cursed the Modi government for undertaking sweeping reforms in its first tenure was given a whipping slap as DBT and Aadhar Inclusive bank accounts proved to be the miraculous lines, which helped the government extend the benefits in the lockdown straight into the bank accounts of the poorest of the poor in the country.
If there was a slowdown across the globe, India surely reduced its impact considerably. Asia’s richest man, Mukesh Ambani raised more than $20 billion this year, by selling 33 per cent of his conglomerate’s digital arm- Jio Platforms Ltd. to investors like Facebook Inc. and Google. In fact, Mukesh Ambani-led conglomerate’s initiatives like Jio Mart, an Indian online grocery delivery service, promises to cause an interplay in digital, e-commerce and telecom sectors, thereby leading to composite growth in all such Indian sectors.
Then came the festive season and every sector started picking pace. The e-commerce companies Flipkart and Amazon sold goods worth 4.1 billion dollars in festive sales. Amazon’s Great Indian Festival and Flipkart’s Great Indian Festival fell around the same time and both companies registered massive growth over these sales figure for last month. Apple India posted record sales with 8 lakh iPhones sold in the country in July to September quarter, which is highest ever in a single quarter.
Purchasing Manager Index, a reflection of manufacturing activity in the country, reached 13 years high to 58.9 in October. Manufacturing PMI was positive even in the previous month when it recorded a figure of 56.8–any reading above 50 shows expansion, compared to the previous month.
Rajiv Bajaj, the managing director of Bajaj Automobiles, who left no opportunity to curse the government after the economic downturn caused by coronavirus must be sitting on piles of cash as Bajaj recorded a bumper sales season. The domestic sale of Bajaj registered 11 per cent growth, that is, up to 2,68,631 units while exports grew by 29 per cent, that is, up to 2,01, 659 units. “Pulsar brand recorded sales of over 170,000 units. Highest ever,” said Bajaj Auto in a statement. Similar was the case with every major automobile company.
India’s economy is set to have a great year — the tone has already been set by the Modi government and the pessimists, as well as the armchair economists, are in a quandary that their overtly inflated doomsday predictions have gone for a toss.