Prime Minister Narendra Modi, on Independence Day final 12 months, laid down a visionary goal of reworking India right into a $5 trillion economic system by 2024-25. The announcement of a Rs 102 lakh crore infrastructure pipeline, beneath the National Infrastructure Pipeline, by the Finance Minister Nirmala Sitharaman final 12 months was seen as a step in that route. But issues did’t fall into place thereafter.
India witnessed an 11-year low GDP progress of 4.2 per cent in FY19 on account of deceleration of mining, manufacturing and farming sectors. And this 12 months, the Covid-19 pandemic reared its head as the most important obstacle to India’s ambition.
The Indian progress story down the ages has been largely consumption-led and spurred by the providers sector. Services have contributed over 50 per cent to the nation’s GDP, with agriculture and manufacturing doing their bit.
The Covid19 pandemic threw India’s economic system right into a tailspin. The gross home product (GDP) contracted by a report 23.9 per cent within the first quarter and seven.5 per cent within the second quarter of 2020-21. India has, in reality, entered a technical recession – two consecutive quarters of contraction – for the primary time in lots of many years.
Every drawback is a chance in disguise, John Adams, the second president of the United States, stated lengthy whereas in the past. The Prime Minister Narendra Modi-led authorities has used the Covid19 calamity to unveil the Rs 29.88 lakh-crore stimulus package deal viz. Atmanirbhar Bharat Abhiyaan to revive the coronavirus-battered economic system and push it again right into a progress trajectory.
It has overhauled labour and farm legal guidelines, fine-tuned international direct funding norms to draw international funding and rolled out a production-linked incentive (PLI) scheme to push home manufacturing. An emphasis on manufacturing and different sectors can scale back the over-dependence on providers as a propellent to progress, as providers, agriculture and trade sectors work in tandem to drive the expansion engine.
India is already on the trail to turning into the hub for hi-tech manufacturing as international giants similar to Apple, Siemens, Toshiba and Boeing are both setting or increasing their manufacturing services within the nation.
The authorities additionally elevated FDI in defence manufacturing beneath the automated route from 49 per cent to 74 per cent to advertise indigenisation of defence manufacturing beneath its Make-in-India initiative. It additionally amended current consolidated FDI coverage to limit opportunistic acquisition of home firms.
The begin of vaccination marketing campaign within the United States and the continued improvement of vaccines elsewhere present a glimmer of hope that the human race could lastly conquer the dreaded covid19 virus. The Indian economic system could not solely revive, but in addition emerge stronger within the post-covid world, not less than going by optimistic projections.
The new geo-political realities, with the emergence of an more and more formidable and aggressive China additionally current India with a possibility to be a substitute for China and grow to be an integral a part of the worldwide provide chain as multi-national corporates search to de-couple from China.
Moreover, India has a powerful demographic dividend and can proceed to take action, within the coming many years. The nation can be a democracy, with political stability and comparatively low publicity to exterior vulnerabilities. All these components ought to propel India right into a $5-trillion economic system. The moot query is when.