Table of Contents
4. Solid Predictions by S&P Global Ratings and IMF
6. Government Reforms and Policies
7. Digital Transformation and Innovation
10. Resilience in the Face of Global Challenges
In the recent times, the Indian economy has been undergoing a positive transformation, giving rise to a sense of optimism among its citizens. A few important happenings and events have provided compelling reasons for Indians to smile. Various factors are contributing to the buoyancy of the Indian economy, and Indians can indeed smile at the prospect of “Acche Din” or “Good Days” as promised by Prime Minister Narendra Modi in his 2014 election campaign. Here are the top 10 reasons for Indians to smile in 2024, finally.
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1. Excellent GDP Growth
S&P Global Ratings has projected India’s GDP growth to reach an impressive 7.0% by 2026. This forecast stands in stark contrast to China’s anticipated growth rate, which is expected to slow to 4.6% in 2024.
The report signifies a shift in the Asia-Pacific region’s growth engine from China to South and Southeast Asia, with India leading the way. Such robust GDP growth is a testament to India’s resilience and the vibrancy of the Indian economy.
Read on: Indian Economic Growth Story: Top Factors Leading to India’s GDP Expansion in FY22/23.
2. Revival of Industry
Despite challenges, India’s industrial sector is experiencing a revival. The uneven monsoon, which impacted agriculture, has simultaneously pushed up industry growth.
High-frequency data indicates a healthy momentum in construction activity, and power generation has surged due to increased electricity demand. Manufacturing is also on the rise, contributing to the overall resurgence of the industrial sector, and predicting better days for the Indian economy.
3. Robust Consumption Demand
The peak of the Indian festival season has passed, but consumption demand remains robust. Leading up to the festivals in the July-September period, electricity consumption, credit growth, mobility data and various other indicators point to strong consumption demand. This resilience in consumer spending is a key driver of the growth of Indian economy, reflecting the purchasing power and confidence of the Indian middle class.
4. Solid Predictions for the Indian Economy by S&P Global Ratings and IMF
S&P Global Ratings has revised India’s GDP growth forecast to 6.4% for the current fiscal year, citing robust domestic demand offsetting challenges from inflation and weak exports. Looking ahead, the agency projects a growth rate of 6.9% in 2025, followed by an impressive 7.0% in 2026.
These predictions align with the International Monetary Fund’s (IMF) projection of India’s GDP growth at 6.3% for the fiscal year 2023-24, showcasing a positive outlook on the Indian economy trajectory.
5. China’s Loss, India’s Gain
The S&P Global Ratings report highlights challenges faced by China, including a stressed property sector and high debt levels, contributing to a slowdown in its economic growth. Despite stimulus measures, China’s approval of a significant sovereign bond issue and bond quotas for local governments underscore the difficulties it is grappling with.
This presents an opportunity for India, as the Asia-Pacific’s growth engine pivots away from China, positioning India as a major player in the region’s economic landscape. The loss for China is obviously, gain for the Indian economy. And with manufacturing units moving away from China, setting up bases in India, the “Good Days” are sure going to get better in the future.
6. Government Reforms and Policies
India has implemented several transformative economic reforms and policies aimed at boosting various sectors. Initiatives such as the Goods and Services Tax (GST), the Insolvency and Bankruptcy Code (IBC), and the “Make in India” campaign have contributed to improving the ease of doing business, attracting investments. These have helped in streamlining economic processes.
These measures signal a commitment to creating a business-friendly environment and fostering sustainable growth of the Indian economy.
7. Digital Transformation and Innovation
India’s rapid digital transformation and innovation have played a pivotal role in enhancing economic activities. The widespread adoption of digital technologies, mobile applications, and online services has not only increased efficiency but has also created new business opportunities.
The burgeoning startup ecosystem, coupled with government support for digital initiatives, positions India as a leader in the technology-driven global economy. All these initiatives and changes are steering the country towards becoming “Atmanirbhar Bharat” or “Self-Sufficient India”.
8. Demographic Dividend
With a large and youthful population, India possesses a demographic dividend that can significantly contribute to economic growth. The working-age population is a valuable asset for the nation, fostering productivity, innovation, and consumption.
India boasts a population exceeding 600 million individuals aged 18 to 35. It must also be noted that a substantial 65% of the populace falls below the age of 35. The demographic dividend of India is anticipated to endure until at least the year 2055–56, reaching its zenith around 2041. During this peak period, the proportion of the working-age population, specifically those between 20 and 59 years old, is projected to reach 59%.
Strategic investments in skill development and education can harness this demographic advantage, ensuring sustained vitality of the Indian economy for years to come.
9. Infrastructure Development
India’s focus on infrastructure development is a crucial driver of economic growth. Mega projects such as the National Infrastructure Pipeline (NIP) and investments in transportation, energy, and connectivity are enhancing the backbone of the Indian economy. With substantial investments of $1.3 trillion earmarked for crucial projects, the surge in capital expenditure has been pivotal.
Improved infrastructure not only facilitates smoother business operations but also attracts investments and stimulates economic activity across various sectors. The PM GatiShakti plan aims to enhance multimodal connectivity, showcasing India’s intent to transition towards a clean and sustainable future. Noteworthy strides have been made in railways, achieving a record 1400 MT Freight Loading in FY 2021-22, propelled by increased capital expenditure, including plans for 400 new Vande Bharat Trains and 100 PM Gati Shakti Cargo terminals.
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10. Resilience in the Face of Global Challenges
India has demonstrated resilience in the face of global challenges, including the recent economic uncertainties arising from geopolitical tensions and the ongoing COVID-19 pandemic.
Proactive measures, including timely fiscal and monetary interventions, have helped stabilize the Indian economy. The ability to navigate global challenges and adapt to changing circumstances underscores India’s strength and readiness for future economic scenarios.
Read on: Indian Economy in 2024: Financial Predictions by Top Experts.
Conclusion
The prospects for the Indian economy look promising, and it reinforces the belief that India is on the path to “Acche Din” (good days). As the world undergoes economic shifts, India stands resilient, ready to capitalize on the opportunities emerging from China’s economic challenges. The Indian economy‘s ability to weather global headwinds and geopolitical uncertainties, coupled with its domestic strengths, paints a bright picture for the nation’s future. It is indeed a time for Indians to smile as the nation charts a course for sustained economic prosperity.
