In­dian Econ­omy: Go­ing Strong

Strong fun­da­men­tals, paving the way for sus­tained long-term growth

The China Post - - SPECIAL SUPPLEMENT -

Un­der the able lead­er­ship of Prime Min­is­ter Naren­dra Modi, the In­dian econ­omy has been do­ing ex­ceed­ingly well. The gov­ern­ment’s ef­forts have not only strength­ened In­dia’s macro-eco­nomic fun­da­men­tals, but have also pro­pelled the econ­omy to a higher growth tra­jec­tory. In 2014-15, In­dia’s GDP growth rock­eted to 7.4 per­cent, which is the fastest among all the large economies of the world. Var­i­ous rat­ing agen­cies and think tanks have pre­dicted that In­dia’s growth will ac­cel­er­ate sharply in the next few years. Bank­ing on the strong fun­da­men­tals and re­forms be­ing un­der­taken by the gov­ern­ment, Moody’s up­graded In­dia’s rat­ing from “sta­ble” to “pos­i­tive.” Now, it is In­dia which is per­ceived to be pow­er­ing the BRICS as its growth en­gine. The poll by the CII As­so­ci­a­tions’ Coun­cil (ASCON) for the April-June quar­ter, based on re­sponses col­lected from sec­toral in­dus­try as­so­ci­a­tions, re­veals a slight im­prove­ment in growth trends in pro­duc­tion com­pared to a year ago.

With the gov­ern­ment’s thrust on man­u­fac­tur­ing, the In­dex of In­dus­trial Pro­duc­tion grew at 2.1 per­cent this year af­ter the neg­a­tive growth last year. In­fla­tion (WPI) has seen a steady de­cline, from 5.55 per­cent in April 2014 to -2.65 per­cent in April 2015. FDI In­flows are in­creas­ing at a his­toric pace. The FDI Eq­uity In­flows shot up by 40 per­cent to reach 1,75,886 crore ru­pees from 1,25,960 crore ru­pees last year. Ac­cord­ing to In­dia’s Min­istry of Com­merce, with the In­dian gov­ern­ment’s “Make in In­dia” ini­tia­tive, launched on Sept. 25, 2014, FDI into the coun­try has wit­nessed a 48-per­cent jump in the seven-month pe­riod up to April 2015. In 2014-15, For­eign In­sti­tu­tional In­vestors (FIIs) in­vest­ment grew by 717 per­cent to US$40.92 bil­lion. Fur­ther, FDI in­flows un­der the ap­proval route grew 87 per­cent to US$2.22 bil­lion.

The fun­da­men­tals of the econ­omy have be­come very strong. The fis­cal deficit is in a state of steady de­cline. In­dia’s cur­rent ac­count deficit re­duced from 4.7 per­cent of GDP last year to 1.7 per­cent of GDP this year. In­dia’s for­eign ex­change re­serves have in­creased sig­nif­i­cantly, from US$311.8 bil­lion to US$352.1 bil­lion. This will pro­vide in­su­la­tion to In­dia in the event of any global shocks. In­dia is em­bark­ing on ush­er­ing in game-chang­ing re­forms through the use of Jan Dhan, Aad­har and Mo­bile (JAM), a unique com­bi­na­tion of three to im­ple­ment di­rect trans­fer of ben­e­fits. This in­no­va­tive method­ol­ogy will al­low trans­fer of ben­e­fits in a leak­age-proof, well-tar­geted and cash­less man­ner.

With the eas­ing of in­vest­ment caps and con­trols, In­dia’s high-value in­dus­trial sec­tors — de­fense, con­struc­tion and rail­ways — are now open to global par­tic­i­pa­tion. Pol­icy in the de­fense sec­tor has been lib­er­al­ized and the FDI cap rose from 26 per­cent to 49 per­cent. Port­fo­lio in­vest­ment in the de­fense sec­tor per­mit­ted up to 24 per­cent un­der the au­to­matic route. One-hun­dred per­cent FDI al­lowed in the de­fense sec­tor for mod­ern and state-ofthe-art tech­nol­ogy on case to case la­bels. One-hun­dred per­cent FDI un­der au­to­matic route per­mit­ted in con­struc­tion, op­er­a­tion and main­te­nance in spec­i­fied Rail In­fra­struc­ture projects. The pro­posed Goods and Ser­vices Tax (GST) will put in place a state-of-the-art in­di­rect tax sys­tem by April 1, 2016. This will cre­ate a uni­fied and com­mon do­mes­tic mar­ket by re­plac­ing a con­fus­ing ar­ray of taxes and pre­vent­ing their cas­cad­ing ef­fects.

Among the other ini­tia­tives of the gov­ern­ment, MU­DRA Bank has been launched for fi­nanc­ing 60 mil­lion small ven­dors and busi­nesses. An am­bi­tious plan to cre­ate hous­ing fa­cil­i­ties for all the peo­ple by 2022 has been launched. The gov­ern­ment has also come up with ma­jor ini­tia­tives such as Dig­i­tal In­dia and Skill In­dia. All of these ini­tia­tives will cre­ate great po­ten­tial for over­seas in­vestors from all over the world. Dear Friends,

On the oc­ca­sion of In­dia’s 69th In­de­pen­dence Day, it gives me great plea­sure to ex­tend my warmest greet­ings to my fel­low In­di­ans in Tai­wan and our Tai­wanese friends.

In­dia is go­ing through rapid eco­nomic trans­for­ma­tion. The new gov­ern­ment is ag­gres­sively pro­mot­ing In­dia for in­vest­ment in man­u­fac­tur­ing and in­fra­struc­ture sec­tors. Our prime min­is­ter is per­son­ally lead­ing the “Make in In­dia” cam­paign.

In­dia suc­cess­fully launched the Man­galyaan space probe to Mars last year. This was in­deed a proud mo­ment for all In­di­ans.

In­dia is a fas­ci­nat­ing place for tourists due to its di­ver­sity. Tourism in the coun­try is grow­ing rapidly, and ac­cord­ing to the World Travel & Tourism Coun­cil, the sec­tor is pre­dicted to grow at an av­er­age an­nual rate of 7.9 per­cent un­til 2023, mak­ing In­dia the third fastest grow­ing tourism des­ti­na­tion over the next decade.

In this re­gard, we are de­lighted to learn that our friends in Tai­wan can avail of the e-Tourist Visa fa­cil­ity that is start­ing to­day, Aug. 15. The de­tails are avail­able on https:// in­di­an­visaon­line.gov.in/visa/tvoa.html.

The In­di­ans’ As­so­ci­a­tion of Taipei will celebrate In­de­pen­dence Day with a flag hoist­ing cer­e­mony at our premises.

Jai Hind!

Ra­jan Khera Pres­i­dent-In­dian As­so­ci­a­tion of Taipei

(IAT)

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