When Covid-19 hit Indian shores, experts were expecting that the Indian economy would crumble under pressure. To be honest, they had their reasons to assert this. For one, we were heavily dependent on Chinese imports for our internal consumption. But, two years down the line, results are astounding, to say the least. Yes, there is an economic slowdown with severe consequences. But that is all around the world and India is immune from it.
Economic prospects all around the world
Currently, the world is trembling. Actually, the problem with most countries all around the world is that they live in a highly globalised world. US Fed hike affects investments in stock markets of other countries.
An announcement of a factory being shifted out of China sends a positive signal to the whole world. It has led to the polarisation of economic power in the hands of a few geographical entities. It would suffice to say that any change in domestic supply chain of the USA, China, India and the European Union causes extreme economic consequences all around the world.
That’s exactly what happened after Covid. US government’s effort to phase out fossil fuels coupled with Corona-induced inflation is leading the American continent towards a state of civil war. The situation is so bad that the US government pumped in printed money, effectively causing more inflation.
But the situation did not improve and in 2021, the US economy grew at the rate of 5.68 per cent. On the other hand, European Union grew only at the meagre rate of 5.4 per cent. China did show some improvement with a growth rate of 8.08 per cent, but its numbers are always under the shadow of a doubt.
As a result of the slowdown in all three aforementioned places and their trickle-down effects, the economic growth all around the world could only crack the rate of 5.7 per cent.
India saved the ship and will keep doing it
But, even the number of 5-7 per cent productivity was not possible if India had not jumped in. India came in to save the ship with an extraordinary growth rate of 8.7 per cent in 2021. It is highest among the major economies of the world.
Apparently, India also pitched in towards saving the consumer spending power of poorer countries. During the Covid, India provided food and vaccines to a large chunk of the world, ensuring that they have enough on the platter to buy other factory outputs.
Even the future prospects of the Indian economy are brighter than anyone else. We are not saying it. It is being stated by the IMF, an organisation which always tries to keep India on tenterhooks.
According to its latest World Economic Output report, India is slated to grow at the rate of 8.2 per cent in 2022 and 6.9 per cent in 2023. On the other hand, the Euro area will grow at the token rates of 2.8 and 2.3 per cent respectively in both financial years. Even an authoritarian regime like China cannot force proper economic output as it is expected to clock only 4.4 and 5.1 per cent growth rate in the upcoming two years.
Biden’s USA which is trying to leave no stone unturned in passing on unnecessary lectures to India will grow by an average of 3.0 per cent over a two-year period. For the USA, even that number seems difficult to achieve as incessant dollar printing after the 2008 financial crisis and radical efforts to transition from fossil fuels have left people with little incentive to work and contribute towards economic growth of the country.
The aforementioned facts make it crystal clear that it is India which is going to drive the post-Covid world. And guess what, the last 8 years of the Modi government have made India ready for that. The ongoing WTO Ministerial Conference being dominated by India’s maverick Piyush Goyal is a prime example of that. But the question is, how did India do it? Let’s see.
Efforts which turned India into a strong force
The first five years of Modi government were spent in nothing but setting up a base for the results we are witnessing today. Due to Jan Dhan Accounts, the poorest man in the country is putting enough saving in the bank, providing liquidity for banks to operate on. Various reforms like Insolvency and Bankruptcy Code (IBC) and strictness on loan waiver helped Modi government to minimise the NPA crisis.
Countries cannot ignore India
The increased investments coupled with initiatives like make-in-India, Aatmanirbhar Bharat, Stand Up India, and Startup India among others helped the country’s consumption pattern float in the upper range.
Through these initiatives, the Modi government involved young population of the country towards productivity. This in turn forced production units to produce more. That is why during Covid times, India was able to stand on its own.
This uptight attitude came in spite of India spending heavily on providing free foodgrains to 80 crores of its population through Pradhan Mantri Garib Kalyan Yojana. Due to all this, the situation has improved in such a drastic fashion and Indians are spending at such an exorbitant rate that economists have been forced to coin the term ‘revenge spending’.
The facts are out there. India has outperformed every other country in the world. Rest of the world is also realising India’s growing economic might and that is why they are courting the ‘Sone ki Chidia’.
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