India on Right Path to Beat China
By Faiz Askari, Editor, SMEStreet, Follow @faizaskari
Staying positive is a winning mantra. Specially it works when things are related to the revival of Indian economy. Now, we must acknowledge the positive element of our country’s economic recovery.
According to global leading financial observers, India is surging ahead win over China by growing 6.5% against the 6.3% growth expected in fiscal year 2016-17. It is required to get noted that 2016-17 will be third year of the Narendra Modi government and by this year, we will start fetching the results of Mr Modi’s aggressive work which is getting heavily promoted by each and every government department.
The status of becoming the fastest growing major economy of the world is not far fetched and not illusionary. International Monetary Fund (IMF) in its latest projection report called “World Economic Outlook Update” acknowledged that India will grow at 7% in 2017-18, a tad higher than China’s 6.9% growth.
IMF projected in October that China’s growth in 2015 and 2016 will be slower than its estimates by 20 and 30 basis points, respectively. One basis point is one-hundredth of a percentage point. “The (Chinese) authorities are now expected to put greater weight on reducing vulnerabilities from recent rapid credit and investment growth and hence the forecast assumes less of a policy response to the underlying moderation. This lower growth, however, is affecting the rest of Asia,” the IMF said.
Now there are two aspects or questions to carefully examine. Should we feel happy only to know that India can grow faster than China? Or Should we focus on methodologies that can help Indian economy to grow faster and faster?
If we look at the methodologies, then it will be a wiser option for interest of Indian economy. And when we look at methodologies for economic recovery then we are trying to talk about the implementation of reforms.
Now, in order to dream better, we must understand what are the positives of our present. Now, the positive side of the present day scenario is the deregulation in India. IN next few years this should lift FDI (foreign domestic investment). Investments account for about 30% of GDP, investments not only strengthen the industrial back bone but will also help raise growth to 7% by 2016, although this is contingent on strong and sustained progress on reforms. Any slackening in the reform momentum could result in a more modest or slower pace of recovery.
We have a couple of years to actually get on to the much needed growth. Till then we all have to stay focused, think economically and enable a business friendly ecosystem.
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Twitter : @smestreet1 & @faizaskari