Despite an economist as Prime Minister for 10 years and a well oriented planning commission working in tandem with the economic affairs committee, the UPA government failed to provide the spark needed for an Indian growth story boost. The fag end of the UPA II government was lackluster and muted owing to political compulsions and announcement of populist schemes and measures that didn't made much economic sense. Now with a new pro development government headed by Narendra Modi at the helm of affairs, economic analysts and experts are hoping that the Indian economic growth story is bound to gain a positive momentum. With the Indian economy growing at a dismal rate of less than 5% effecting revenue growth, the revival of the economy is likely to come with some hard measures.
With the new government in charge for almost a month, the upcoming annual budget is likely to offer the first glance at the economic policy road-map to be followed by the government, Finance Minister Arun Jaitley has already said that his government would work on priority to fix the overall health of the country's economy.
- With both local and global investors keeping a close watch on the annual budget.
- A pragmatic budget devoid of any populist schemes is likely to offer much needed boost to the Indian economy.
With the Prime Minister also mentioning in his speeches that it is time to take some tough decisions to rebuild the economy, experts and financial analysts are hopeful that India can walk the path of firm growth with minimal risk of large fiscal deficit to GDP ratio.
Monsoon Woes and Inflation:
A growing concern for Indian economic outlook for the current year is the case of controlling inflation. While retail inflation was brought to a three month low levels of 8.28% in May, a case of lower than average monsoon season, hoarding of essential commodities like sugar and onions offers a serious challenge for the government.
With the Reserve Bank of India keeping a close look at the inflation figures to frame its repo rate policy, a long period of high inflation may force the premium bank to later its repo and reverse repo rates.
With the Reserve Bank of India keeping a close look at the inflation figures to frame its repo rate policy, a long period of high inflation may force the premium bank to later its repo and reverse repo rates.
Future Outlook of the Indian Economy:
Despite of all the challenges being faced by the new government and slowdown in overall economic growth in South Asian economies, Indian economy has a good upside in the short term.
According to a recent report by World Bank economists, Indian economy has the potential to register a growth of 6% without showing any effects of overheating. The report mentions a lower monsoon as a challenge but added that the introduction of the Goods and Services Tax as suggested by the finance minister can prove to be a transformation factor in reviving the economy.
According to a recent report by World Bank economists, Indian economy has the potential to register a growth of 6% without showing any effects of overheating. The report mentions a lower monsoon as a challenge but added that the introduction of the Goods and Services Tax as suggested by the finance minister can prove to be a transformation factor in reviving the economy.
Impact of Indian Economy on Global Markets:
Indian economy is likely to offers a positive impetus on all global markets especially the ones in Asia. India-China trade is likely to scale even higher heights as China looks to work in tandem with India as a driver of the global economy, Economic experts also believe that ASIAN countries are likely to formally launch a unified common market in 2015 which can act as a game changer in the global economic market.
