Investors inside and outside India are closely tracking the economic growth of the country and one of the clear indicator to evaluate its potential is the Gross National Income per capita. Estimate show that India will become a middle-income economy with GNI per capita of $1,005-$12,235, making it a middle-income economy, according to World Bank’s definition. But India must post strong GDP growth of 8% or higher to ensure the growth story. This is imperative to maintain inventor interest in the country.
Nevertheless, the journey is not going to be an easy one for India. Challenges such as low infrastructural growth, slow pace of labour reforms due to inefficiencies in the regulatory framework puts country’s economic development in jeopardy. The government should be able to strike a right balance between the growth and inflationary pressure. A strong banking and financial is also critical to ensure growth but it remain largely unorganized and recent surge in non-performing assets of bank are raising concerns for priority sector lending. India needs to become more conducive for public-private partnership.
The government in India is not overlooking the challenges and is making focused efforts to resolve these issues. The NDA government launched programs such as Make in India and Digital India which have greatly improved the status of manufacturing sector in India and digital footprint of the country. Digital empowerment will ensure that companies are able to exploit the potential of the vast rural market. One such instance is of the e-commerce economy of India which has made it possible to rural India to access opportunities in other parts of the country. According to India Brand Equity Foundation, e-commerce in India is expected to grow to $200 billion by 2026 from $38.5 billion as of 2017.
The condition is only set to improve further. One of the trait that sets India different from economies such as China is the growth of working population of India. By 2020, the median age of India will be 28 which will increase the demand of jobs exponentially. Furthermore, the watershed event of 2019 will be the General election and India will witness a slew of initiatives which can be exploited for better economic growth.
