Growing India - True or A Myth

First of all if you do not what India is then let me tell you, India is the name of a country situated in South Asia with more than 1.2 billion population. India is the largest democracy in the world. Yes, you heard it right. And also it is the seventh largest country (in terms of area) in the world. Rather than giving you geographical knowledge and facts about India, i would certainly focus on growing India.

At present times, India has the highest youth (18-35 years age) population in a country (approx. 65% of its total population). Therefore, we notice that at this moment India has the brightest chance of becoming the largest economy in the world. 

But all this is rued most probably by their leaders. India has a rich history of producing some great freedom fighters such as Mahatma Gandhi, Netaji  Subash Chandra Bose and some world class leaders like Late Shmt. Indhira Gandhi, Lal Bahadur Shastri, Pandit Deen Dayal, Atal Bihari Vajpayee and list goes on. But their present generation of leaders lack interest in development of nation and rather focus on their personal development.

Instead of all these factors, India is 2nd fastest growing world's economy. The service sector makes up 55.6% of GDP, the industrial sector 26.3% and the agricultural sector 18.1% Right now it stands as 7th largest GDP of the world. Since 1991, India became the one of the fastest growing major economy. This was largely due to implementation of market based economic reforms. India is also the third largest purchasing power parity (PPP).  India's consumer market, currently the world's eleventh-largest, is expected to become fifth-largest by 2030 and is certainly attracting many foreign investors which is helping Indian economy in growing at a larger rate. India became the third largest smartphone market in the world after China and the U.S in the year 2011-12 surpassing Japan. According to a report, during the next four decades, Indian GDP is expected to grow at an annualised average of 8%.The report highlights key growth factors: a young and rapidly growing working-age population; growth in the manufacturing sector because of rising education and engineering skill levels; and sustained growth of the consumer market driven by a rapidly growing middle class. As the report highlights the factors responsible for growth of India, we can say that it is mainly because of hard work of the people in support of nation's economy and some good government policies and importantly some very good initiatives by Governor of Reserve Bank of India Mr. Raghuram Rajan in recent times and not to forget about the falling prices of crude oil which are further expected to fall are key factors which are helping Indian economy in growing at a sustainable rate.

All of this is going in India's favour. Fiscal deficit is well under control (under 4%). This is largely contributed by falling crude prices as India's most money is spent on buying crude oil. Moreover, due to lack of growth in GDP (in recent times) of China, India is the most preferred location for manufacturing. Current Prime Minister of India Mr. Narendra Modi is presently the biggest brand ambassador of India in foreign countries and is selling good.  He has attracted large amount of foreign investors due to his efforts and his pro industrialist image. He is considered as industrial friendly leader. Some popular government policies such as Pradhanmantari Jan Dhan Yojana associated with opening of bank accounts mainly of poor people, Give It Up (give up of LPG subsidy), Pahal (Direct transfer of Subsidy Cash for LPG into your bank account) and various other policies have help government to stop wastage of nation's wealth and  put that money in good use.

RBI has well control over the inflation and it has remained low for quite a long time (more than a year). Indian rupee is also now less volatile against US Dollar staying between 6 1-64. Government has increased FDI (Foreign Direct Investment) in many sectors such as defence, health insurance, medicine, automobiles etc. and due to this India has seen a 120% rise in FDI over a year. But the Indian share market has seen quite what we can call a downfall in last three months. BSE's (Bombay stock Exchange) was well over 28,000 points in august but now has come down to probably 25,000 points. In this period it has seen the biggest downfall for a day in last 10-15 years. I think that downfall was of at least not more than 1000 points. But slowly and steadily Stock Market Exchanges of India (BSE & NSE) are becoming more stable and less volatile.

External factors mainly downfall of China's growth and devaluation of its currency Yuan and Asia's stock exchanges were responsible. Also Federal Bank of America has also kept its interest rate same which has somewhat affect BSE' s Sensex. The downfall in growth and in share market can be seen everywhere in the world particularly in China and other Asian countries and in Europe also. But India has been continued to be an Island of Calm which has attracted investors.

Agricultural sector which is second largest contributor to India’s GDP has somewhat remain flat over a long period or has seen a constant but steadily increase. India before 1991 was considered as agricultural country. But after 1991 reforms, it changed to a rapidly growing industrial country. Major agricultural products include rice, wheat, maize, pulses, silk;  fruits, gram, oilseed, cotton, jute, tea, sugarcane, and potatoes are growing good instead of drought and weak monsoon over last two years. India continue to touch a new high with its growth of rice and wheat every year.

One sector that has certainly seen the biggest rise in recent years is IT sector.  IT sector in India is growing at a huge amount of rate and probably faster than any country’s IT sector. Presently, It sector contributes 7.5% of GDP. E-commerce  companies profits has increased from 100- 1000%. Amazon India, Flipkart, Snapdeal all are growing good and  are helping in bringing small business online so that these small business can grow. This is surely helping Indian merchants. All of these factors are contributing in India’s GDP. 

Automotive sector has also seen great increase in profits as it is the second fastest growing sector of India in world. Sales of cars , bikes, HMVs all have seen increase from 10-60%. Present government has also decreased some heavy duties on automobile manufacturing industry. Falling prices of petrol and diesel has also somewhat helped the industry in selling vehicles.  

Since we know that India is very rich in natural resources particularly in Coal, Mica, Lead, Zinc, Gypsum, Silver, Limestone, Iron, Aluminium and various other costly resources which are of a great importance in development. Electricity in India about (60-70%) is produced in thermal power plants run by coal. And due to the order by the Supreme Court of India, the central government has to auction all the coal blocks again given to companies after 1993.This step means that Indian will attract a large part of companies looking to invest their money. And due to auction of around 150 blocks India will earn a huge amount of money probably in billion rupees. Re- auctioning of 2G spectrum is also done in recent times through which also Indian government earned a huge amount. These things have been helping government in a way that you can achieve most of it when you start from zero rather than starting from a number greater than zero. The effect of some good steps taken by government has certainly increase revenue for the government. According to a latest report profit margins are up for first time since 2007-08 for major sea ports . Profit margins of major ports declined from 43 per cent in 2007-08 to 28 per cent in the 12 months ended March 31, 2014. Since then, margins increased to 38 per cent in the first five months of the current financial year 2015-16. All this factors have been helping in achieving 7% GDP by the end of financial year 2015. 

So we see that India has a bright future but there must be something in the country that can get the full use of potential lying in the youth. India now, probably has the brightest chance in becoming world's largest economy. But not much has been done about achieving it and unlocking the potential of youth is first step that government must take. Literate Indian youth is jobless but not hopeless. Most of the biggest jobs in world's largest companies are held by Indian such as Microsoft's CEO Mr. Satya Nadela, Google CEO Mr. Sundar Pichai . 36% of doctors in U.S.A are Indians. Major positions in companies such as Google, Facebook, Twitter, Tesla, General Motors are held by Indians. There are so many examples all of which cannot be discussed here alone.  No one can ignore the Indian youth today but particularly there needs to be more creative leaders that can run India and unlock the potential of its youth.

 This article is not very technical and more or less opinionative. Therefore do not go by only this article and conform more about Indian economy before making any opinion about India's economy. This is a personal view but not incorrect.