International Monetary Fund, the global lending and forecasting agency, has predicted that India will be the only economy to grow at double-digit in the calendar year 2021. As per the IMF’s World Economic Outlook update, India will be the fastest-growing economy for the next few years with 11.5 per cent growth in 2021 and 6.8 per cent in 2022, which is significantly higher than 8.5 per cent and 5.6 per cent of what is predicted for China in 2021 and 2022 respectively.
Praising the economic reforms implemented by the Modi government amid the pandemic, IMF’s Managing Director Kristalina Georgieva this month said that India “actually has taken very decisive action, very decisive steps to deal with the pandemic and to deal with the economic consequences of it”.
“What we see is that transition, combined with policy support, seems to have worked well. Why? Because if you look at mobility indicators, we are almost where we were before Covid in India, meaning that economic activities have been revitalized quite significantly,” IMF’s MD added.
The policy analysts, economists and corporate houses around the globe have given positive reviews about the economic policies of the Modi government. Some of the most important economic reforms which were waiting in the policy corridors since the last few decades like- farm laws, labour laws, GST, Insolvency law, rationalisation of corporate and income tax, were implemented by the Modi government in the last few years.
The GST was waiting for implementation in the policy corridors for almost three decades, as the previous governments could not bring all the stakeholders together to implement the uniform indirect taxation. But the Modi government has been able to build consensus for the implementation of GST in one of the most complex markets around the world. GST has helped increase the number of indirect as well as direct taxpayers. Top economists have predicted that GST will improve the GDP growth of the country by 1-2 per cent.
Similarly, the IBC is solving the bad loans crisis of the Indian economy, which has slowed down the credit for the past decade. Given the structural reforms in the Indian economy, the long term prospects look better for India when compared to the rest of the world which is dealing with acute slowdown and hopelessness amid the pandemic.
The market in India is flooded with liquidity and once the danger of Coronavirus ends, there will be a huge surge in investment as well as consumer spending. Many sectors like Information technology, financial services, and agriculture are already performing better than the pre-pandemic years, thanks to economic reforms and fundamental changes in the macroeconomy brought due to Coronavirus. The other sectors too will pick up once the threat of the virus is over and the economy will grow like never before.
IMF’s 2021 growth projections for India are just the start of the glorious decade the country is set to have in terms of economic growth. India will become the third-largest economy, overtaking Germany and Japan- in the next few years (probably before 2025). It will soon become an economic superpower, paving the way for Vishwaguru Bharat once again, after centuries.