Indian Economy: Going Strong
Strong fundamentals, paving the way for sustained long-term growth
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.
Rajan Khera President-Indian Association of Taipei