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As most major economies struggle to get out of the COVID induced recession, India comes out of it shining

TFI Desk by TFI Desk
27 February 2021
in Economy1
PM Modi, Puducherry, BJP india

(PC: ZoomNews)

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At a time when countries around the world are imposing further lockdown and witnessing sharp falls in the Gross Domestic Product, India grew at 0.4 percent, posting the first positive growth rate since India entered in Covid imposed lockdown. In the third quarter (October-December), the Indian economy has reported a growth by 0.4 percent, thanks to the 9.9 percent growth in financial, real estate, and professional services.

As per the second revised estimate of GDP, released by the Ministry of Statistics and Programme Implementation, the GDP contracted at a slower pace in the second quarter while in the first quarter, the contraction was steeper than what was estimated by the Ministry at that time.

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However, thanks to the lockdown imposed by the Modi government at that time, the country overcame Covid more easily as compared to other countries which rejected the lockdown and is now growing.

The even brighter spot in the economy is the revival of the sectors like real estate, construction, and financial services which employ a large number of people. Moreover, government spending has grown at a rapid pace in the last few months driven by capital expenditure.

As of now, countries in the Western world are still facing immense downside pressure due to the Coronavirus pandemic. Moreover, the nature of government expenditure – giving money directly in the hands of the people – has not been able to revive the economy because the people are still stuck in their homes. On the other hand, in India, the Coronavirus has been tamed and the nature of government spending – focus on infrastructure projects – has helped in the revival of the economy.

The revival in the greenfield sectors shows that India is set to have a great year as far as the economy is concerned. Previously, 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.

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, labor laws, GST, Insolvency law, rationalization of corporate and income tax, were implemented by the Modi government in the last few years.

IMF’s 2021 growth projections and the data for the third quarter show the start of the glorious decade the country is set to have in terms of economic growth has begun. 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.

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