Let’s explore the Indian Economy scene as of current year i.e. 2018
The seventh largest country by area, India is the second most populated country with over 1.3 billion people. We are a part of the most populous democratic country in the world. The country’ uniqueness is its diversity and hence has adapted itself to global changes with comfort and poise. As per Central Statistics Organisation, India has emerged as the fastest growing economy in the world.
In its demographics, India is witnessing a consumption boom fuelled by a vast transformation. High disposable incomes and large English-speaking middle-class population have led to higher demand for products from the West.
India is characterised as a developing mixed economy. The country is ranked 141st in the world based on nominal Gross Domestic Product (GDP) per capita and 123rd based on GDP by Purchasing Power Parity (PPP) per capita.
Below is the interesting facts about the Indian economy, which you may not have been aware of:
- As per the estimates of Gross Domestic Product by Central Statistics Office, the Indian economy grew 8.2% year-on-year in the first quarter of Financial Year 2018-2019, which beat the consensus estimates of 7.6%.
- Foreign direct investment inflows stood at USD 12.75 billion during April-June 2018.
- Foreign exchange reserves of India were USD 401.79 billion up to the third week of September 2018.
- Mutual Funds asset base stood at Rs. 25.2 trillion at the end of August ‘18 as against Rs 23.06 trillion at the end of July 2018.
- India’s IIP (Index of Industrial Production) advanced by 6.6% in July 2018. Over the same period in 2017-18, the cumulative IIP growth was 5.4%.
- The eight key sectors of infrastructure rose 6.6% year-on-year in July 2018, with refinery products exhibiting the maximum growth of 12.3%.
- There is an increase of 9.81% in the domestic passenger vehicle sales in April-August 2018-19 over the same period last year.
- During April-June 2018, India’s current account deficit was 2.4%. The CAD for the financial year 2017-18 stood at 1.9% of GDP.
- Wholesale Price Index inflation index increased by 0.3% to 120.0 in August 2018 compared to 119.7 in July 2018.
- India’s Consumer Price Index inflation rate decreased to 3.69% in August 2018 as compared to 4.17% in July 2018.
- There was a growth of 53.3% in total merger and acquisition activity year-on-year to reach USD 77.6 billion in 2017. Merger and Acquisition involving Indian companies stood at USD 74.8 billion during January-August 2018.
- The total value of private equity/venture capital investments reached a record high of USD 26.8 billion in value terms in 2017. PE/VC investment crossed USD 18.7 billion marks during January-August 2018.
- The Indian Government has launched an initiative to create 100 smart cities and AMRUT (Atal Mission for Rejuvenation and Urban Transformation) for 500 cities with an outlay of Rs 48,000 crore and Rs 50,000 crore respectively.
According to The World Bank, the Indian economy is pegged to grow at 7.8% in 2018-19. According to Ms Kristalina Georgieva, Chief Executive Officer at The World Bank, demonetisation has helped in fostering a clean and digitised economy in the long run.
According to Boston Consulting Group, by 2025, India is expected to be the third largest consumer economy as its consumption may triple to USD 4 trillion. This is predicted based on the shift in consumer behaviour and expenditure pattern. According to a report by PricewaterhouseCoopers, it is also estimated that India will surpass USA to become the second largest economy concerning PPP (Purchasing Power Parity) by the year 2040.
Mr Narendra Modi, the Prime Minister of India has stated that India is expected to grow five-fold by 2040, due to a series of policy measures.
It is quite an exciting time of opportunities and ambitions while India is all set to become a $5 trillion economy by 2025 owing to the structural reforms, consumption-led demand growth, rich demographic dividend and boost in manufacturing and industrial activity.