Prime Minister Narendra Modi’s recent ‘Mann Ki Baat’ highlights and delineates that 2022 had been a remarkable, un-parallelled and wonderful year from the angle of the exemplary performance of the Indian economy and accordingly, it has turned the spotlights on the extraordinary resilience of the Indian economy amidst global headwinds. It has won the grudging admiration of even global financial institutions which are ever sceptical of Indian economic prosperity and normally reluctant to acknowledge India’s progress.
While IMF MD Christina Georgieva called India a bright spot in a dark horizon, the Organisation for Economic Cooperation and Development (OECD) terms and foresees India as one of the few powers which could help the world sidestep and turn around the global recession. India heads the G-20 at present.
The present government has set our financial fundamentals pragmatic and upright rather than going for patchwork solutions to extend immediate cosmetic relief and make electoral gains
The credit for the commendable and spectacular performance of the Indian economy is primarily attributed to the far-sighted, transparent, constructive and forward-looking policies of the Narendra Modi Government. The present government has set our financial fundamentals pragmatic and upright rather than going for patchwork solutions to extend immediate cosmetic relief and make electoral gains. Sustained, consistent and sincere efforts have been inputted to create an all-time ameliorated ecosystem for future growth, and it has ushered in yielding exemplary results. Current economic indicators testify it.
The Key Indicators
Food grain production is self-reliant, ever highest and abundant, and key industrial sectors have come of age. The Government has hugely enhanced capital expenditure (Capex) to improve and augment infrastructure. A slew of world-class expressways, airports and metro rail networks are currently functional and operational. India’s Steel and Cement industries are now un-parallelly robust and are accredited as the second biggest in the world. Credit lines extended to the MSMEs have been liberalised and strengthened, and the startups are afforded overwhelming support. There is an assiduous, concerted and sincere effort to remove and unplug regulatory bottlenecks and ensure ease of doing business. Skyrocketed Inflation is under control. According to Rahul Raj, Co-founder and CEO of FioBiz, purportedly India’s first neo-banking platform for MSMEs, “India’s macro-economy parameters look fantastic and more positive than those of most of the major economies.”
Opposition’s Baseless Brouhaha
Nonetheless, all these have not impressed the compulsive and repulsive critics from the Opposition. The pugnacious Trinamool MP MohuaMoitra recently tried to lash out at Narendra Modi Government, alleging it to spread falsehoods about India’s poor economy. Earlier this year, Congress leader Rahul Gandhi had taken to Twitter sounding a grave concern that “India looks a lot similar to Sri Lanka,”
Seven months into Rahul’s doomsday prediction, the Indian economy attained and retains a sound, healthy and resilient status. The global spiralling inflation, soaring energy prices and weak household incomes that have pushed the global economies into a tailspin haven’t afflicted the sustained, strong and augmented Indian economy.
Focus on Infrastructure
Narendra Modi Government’s inclusive growth approach of welfare schemes for the common man and incentives for industries have revved up the growth engine. The Government’s focus on infrastructure development through projects like Gati Shakti, Udan Scheme, Sagarmala Project and PM Awas Yojana have steered development to the far-flung areas and every nook and corner of India. The PM’s Gati Shakti of an estimated worth of USD 1.2 trillion scheme equals the USD 1.2 trillion worth US Infrastructure Act initiated by the President, Joe Biden and China’s One Belt One Road (OBOR) scheme. The multi-modal infrastructure development is expected to catapult the Indian industrial growth as happened in the US in the 1960s after the development of interstate highways.
Atmanirbhar Bharat and Make in India
The emphasis on developing the manufacturing sector through “Atmanirbhar Bharat” and “Make in India”, have prepared the ground for a quantum leap of the economy. The impact of the Central schemes have been gainfully visible, especially in the defence sector.
India’s defence and aerospace exports have risen from Rs 4,682 crore in 2017-18 to Rs 12,815 crore in 2021-22. The aircraft carrier INS Vikrant built at the cost of roughly Rs 20,000 crore, testifies to the country’s technological prowess.
The launching of Innovations for Defence Excellence ( iDEX) scheme in 2018 involving all categories of industries including MSMEs and startups to foster technology development and innovation has been an outright success. The establishment of defence corridors under Make in India scheme in Uttar Pradesh and Tamil Nadu is underway. A defence industrial ecosystem is being created in India which in the long run will radically change the defence sector.
India’s startups and MSMEs are now the cynosures of eyes. The steep growth of the toy manufacturing sector symbolises the quantum leap of MSMEs. India’s toy exports have witnessed a steep spike of 240 per cent from roughly Rs 797 crores in 2014-15 to Rs 2706 crores in 2021-22. Many MSMEs and startups in the electric vehicle, healthcare technology, aerospace and defence industry are registering fast growth and attracting record investments
The alternate energy sector is an area which has gigantically benefited from Atmanirbhar Bharat. India’s solar module manufacturing capacity took a Quantum leap in 2022 when it rose to 30 GW manufacturing capacity, thanks to Atmanirbhar Bharat, notes Hitesh Desai, chairman and MD of Waaree Energies. The capacity is all set to increase to 100 GW. The performance-linked incentive (PLI 2) is expected to further help the sector’s growth in 2023.
The emphasis on developing the manufacturing sector through “Atmanirbhar Bharat” and “Make in India”, have prepared the ground for a quantum leap of the economy. India’s defence and aerospace exports have risen from Rs 4,682 crore in 2017-18 to Rs 12,815 crore in 2021-22
The PLI scheme has worked well for the mobile manufacturing industry also. The mobile exports from India, which aggregated to Rs 22,500 crore in 2020-21, jumped to Rs 45,000 crore in 2021-22. It had topped over Rs 50,000 crore by the end of November ’22 in fiscal year.
Monetary Conditions
The Reserve Bank of India’s market interventions have stabilised inflation to around 6 per cent, when the entire Europe is reeling under it. The capital expenditure of the Government has risen by 61 per cent in the first half.
India’s forex reserves recently reversed the declining trend and climbed up in five consecutive weeks in November and early December 2022. The foreign exchange reserve of USD 563. 50 billion on December 16, 2022, were quite robust and comfortable by all standards. Household debt in India as a share of GDP came down from 39.3 per cent in 2020-21 to 35.3 per cent in 2021-22, according to a recent RBI report.
Ample Food Grains and Milk Production
While the neighbourhood is reeling under food shortage, India has sufficient and sustained food grain stocks. The Government has decided to extend the provision of existing leverage of five kilograms of food grains free of cost to around 80 crore public further till December 2023. India is now the top producer of milk in the world at 220.78 million tonnes per day in 21-22. Fish production was just 61.36 lakh tonnes in 2013-14. In 2021-22 it is 121.21 lakh tonnes.
MSMEs and Start-ups
India’s startups and MSMEs are now the cynosures of eyes. The steep growth of the toy manufacturing sector symbolises the quantum leap of MSMEs. India’s toy exports have witnessed a steep spike of 240 per cent from roughly Rs 797 crores in 2014-15 to Rs 2706 crores in 2021-22. Many MSMEs and startups in the electric vehicle, healthcare technology, aerospace and defence industry are registering fast growth and attracting record investments. According to Rahul Raj, CEO of FioBiz, MSMEs will continue its bullish run in the coming year too. It will be the growth driver.
Says Bhavik Chinai, Group CEO of BVC Logistics and chairman of Vamaship: “for startups, it’s really an exciting time. Digital businesses will thrive in the coming years and the ecosystem has matured. Traditional industries are on the cusp of a transformation. Industrial sector will grow through adoption of new technologies like AI and automation.”
Namit Chugh, Investment Lead of Boston-based health tech focused VC W Health Ventures says, “It’s a great time to invest in pre-seed/seed companies in India as capital required and cash burn are less.”
Overall, the Indian economic scenario seems quite robust and forward-looking.
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