As per the recent report which was presented by The World Bank, India, as a country, is set to arise as the world’s fastest-growing economy by the year 2015. The economy of India ranks seventh in the world by nominal GDP and ranks third by purchasing power parity. According to the report, the rate of India’s GDP is expected to grow at 7.5 percent in the year 2015. Due to strong government policies and reforms, RBI’s inflation focus scenario, backed by global commodity prices, has caused improvement in economic fundamentals of the country.
The long-term growth prospective of the economy is moderately positive because it comprises of a young population. Hence, the dependency ratio is low, plus healthy savings and knowledge about investment rates are high. This current state of the qualified, educated mass has resulted in increasing integration and participation in the global economy.
Investments and Developments:
In terms of mergers and acquisitions, as a country, India has appeared as one of the most robust contenders in the war of deals and contracts across the world. The total transaction value is 115 and 3.3 billion UD dollars for the month of May 2015. About 23 percent of the total transaction value comes from the Pharma sector, and this sector continues domination over the economy.
Key Elements behind the Economic Growth:
- The economic growth was largely due to the improvement in manufacturing growth, and the numerals are 5.1 percent in the month of April.
- India’s Index of Industrial Production raised by 4.1 percent in the month of April 2015 compared to 2.5 percent in March 2015.
- India’s Consumer Price Index states that the inflation rate has increased to 5.01 percent in the month of May 2015.
- The Wholesale Price Index states that the inflation rate has continued negative at 2.36 percent for the seventh successive month in May 2015.
Government Initiatives for economic growth:
Various foreign companies and investors are investing their facilities in India because of the “Make in India and Digital India” initiative by the government. Prime Minister of India, Mr Narendra Modi, has launched this initiative to improve the manufacturing sector and digital infrastructure of the Indian economy. This action has been taken to increase the buying capacity of an average consumer that, on the other hand, will shoot up the demand. Hence, the rate of development will rise and will be highly beneficial to the investors.
Elements behind the Economic Development:
- Taiwan’s electronic manufacturer- Foxconn Technology Group is making arrangements for the manufacturing initiative of Apple iPhones in India.
- India Electronics, Semiconductor Association and Nasscom have signed a deal to thrust up the electronics manufacturing share to 25% of GDP by the year 2025.
- The state of Hyderabad is ready to convert itself to a mobile phone manufacturing hub and will create 150,000 to 200,000 vacancies for jobs.
- Ford Motor Company has initiated plans to manufacture their car model “EcoSport” here for the purpose of exporting it to the US.
The Path Ahead:
India will be eye witnessing a GDP growth rate of 7.5 per cent in the year 2016, as stated by the reports presented by the International Monetary Fund and the Moody’s Investors Service. The reason behind this improvement is the high level of investor confidence and better policy reforms. Global Economic Prospects report given by the World Bank remarks India as the chief contender in World Bank’s growth chart for major economies.