good picture

Source: The Hitavada      Date: 11 May 2018 11:17:10

THE projection by the International Monetary Fund (IMF) that India will register a Gross Domestic Product (GDP) growth at a very healthy 7.4 per cent in 2018 and 7.8 per cent in the following year, shows a very good picture of India as the world’s fastest-growing economy. This defies all the doomsday predictions by political Opposition in the country about how the economy would sink faster than anyone could imagine, thanks to the dubious policies of the Narendra Modi Government. One after another, various international rating agencies and economic watchdogs have been making similar projections of India as a fast-growing economy, raising the levels of hope in the common people. Politically, these indicators may be read in any manner, but for the people in the streets, all these point to only one inference -- that the Indian economy is making a terrific sense when most nations in the world are facing a pessimistic prospect with GDP growth getting stuck between 2 per cent and 3 per cent.
There was a moment not far back in time when the whole nation seemed to look at a doomed economy, especially when Prime Minister Mr. Narendra Modi announced partial demonetisation whose levels he stepped up later. There was some trouble in the system for a while.

But everything settled down faster than anyone could imagine. Then came the Goods and Services Tax (GST) whose impact was predicted to be terribly negative on the domestic trade and the national economy. Initial months after the launch of GST did give some anxieties to the nation. Yet, now things have settled down in a healthy manner and the monthly GST collection is rising without fail. The GST collection for the month of April came to be over Rs. one lakh crore, which was at least 10 per cent higher than the collection of the previous month. This development demonstrates the correctness of not just the Government policies but also their implementation. Many countries have expressed a sense of awe about the economic development in India.

All these are beginning to reflect in the thinking and assessment of various global rating agencies, banks and financial institutions. The IMF prediction of 7.4 per cent growth in 2018 and 7.8 per cent growth in 2019 is the freshest reflection that should make India very happy.
In political terms, this prediction reads very well for the ruling Bharatiya Janata Party (BJP) and its allies in the National Democratic Alliance (NDA). When Opposition parties, Congress in particular, are predicting an economic doom, the world is reading the Indian progress in very positive terms. The global agencies register not just the growth in hard numbers but also assess the social impact of governmental policies. On all those parameters, the Indian economy has come to be appreciated.

Of course, there are several segments of the national economy that need a lot of corrections. It is obvious that the Government has set in motion that process in a strident manner. For example, banking. The Government put in place a corrective mechanism on an auto-operating mode, and a stream of exposures of frauds of varying sizes started emerging from the hitherto closed doors of the banks. Similar corrections will have to be made operational on an urgent basis in other segments.
If the Government is able to handle the fluctuations in international oil prices and keep the pressure on the national exchequer to the minimum, then the economy will maintain its upbeat mood. That will certainly require a lot of resilience, which the Government has demonstrated in the past four years. Minus this challenge, things appear smooth for the economy. The IMF prediction has brought good news of a good picture to the people, which will have a positive impact on national mood.