India is constantly showing resilience and growing above the pre-pandemic level of GDP growth during the post pandemic and geo-political developments, according to a report by PHD Chamber of Commerce and Industry. It said that per the IMF data, India recovered significantly from -5.8 per cent GDP growth in 2020 to 9.1 per cent in 2021 and 6.8 per cent in 2022 with projected growth rate of 5.9 per cent in 2023. The growth rate for 2021 to 2028, it said, are significantly higher than the growth rate of 3.9 per cent that India posted in 2019, before the pandemic and also above the top 10 leading economies and overall world economic growth.
How is India faring against the world economy?
While the world economic growth had recovered in 2021 at 6.2 per cent from -2.8 per cent in 2020, it decelerated again to 3.4 per cent in 2022 and is projected to decelerate further at 2.8 per cent in 2023 and 3.0 per cent in 2024. Further, among the top 10 leading economies, eight of them including United States, China, Germany, United Kingdom, France, Canada, Italy and Brazil, will perform below their GDP growth rates of 2019, even as India’s economic growth will be above 6 per cent in 2023-2028, according to IMF data. “Going ahead, continued economic reforms in India would further strengthen the economic fundamentals of the country to maintain a steady economic growth trajectory in the coming years,” said PHDCCI.
What’s affecting many of the economies’ recovery process was the conflict between Russia and Ukraine, high commodity prices, inflation trajectory and synchronized move by the central banks in increasing the interest rates. Per the IMF data, India remained a growth leader among top 10 leading economies with 5 per cent GDP growth followed by China at 4.4 per cent, South Korea at 2.1 per cent, United States at 1.8 per cent, Canada at 1.6 per cent, France at 1.2 per cent, United Kingdom at 1.0 per cent, Germany at 0.9 per cent, Italy at 0.8 per cent and Japan at 0.3 per cent.
What’s helping India maintain a leading position?
While India has proven its reliance on sharp recovery from the pandemic years and its consistent growth rate as the driving force behind staying at the top position, what all factors will help the country drive the growth? “Strengthening of connectivity with Global Value Chains (GVCs) will help to improve supply side bottlenecks and reduce costs of doing business. Enhanced competitiveness of the Indian economy will attract more and more investments and help to create more employment opportunities for the growing young population in the country,” PHDCCI said. However, it also maintained that the industry needs a great hand holding in a difficult environment caused by global economic uncertainties. “We need to focus more on the manufacturing sector as high cost of borrowings, high prices of raw materials have impacted the price – cost margins of the producers. Reduced cost of doing business such as easier compliances and a robust Single Window System will enhance ease of doing business in the country,” said Saket Dalmia, President, PHD Chamber of Commerce and Industry.
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