Indian economy has become a global role model for several developing countries. India has the largest population in the world and seventh largest country in terms of area, thus, it makes India’s economic growth story a remarkable journey. Indian economy was reeling under the ruins of economic distress, that encapsulated the country for 200 years of colonial rule. Indian economy recently became the sixth largest economy in the world in terms of gross domestic product (GDP) by overtaking France. After suffering from transitory shock in the last two years due to reforms like demonetisation and Goods and Service Tax (GST), Indian economy is back on track.
According to the World Bank’s 2017 updated data, Indian economy has leaped frog France as the sixth largest country in terms of economy based on the GDP. When the Modi government introduced transitory reforms like demonetisation and GST, many analysts and economists were skeptical with the way reforms were carried out. With several global rating agencies downgrading India’s GDP projection due to the uncertainty prevailing in the Indian market. However, the Indian economy slowly and steadily recovered and at the end of 2017, Indian economy’s GDP stood at $2957 trillion while French economy value was $2582 trillion.
The current NDA government’s reforms and measures to put Indian economy back on track in the last four years are paying off. Three was a growing skepticism among the global investors and markets during the end of the second tenure of UPA. The UPA-II government was marred with controversies and scams, putting a question mark on the India’s economic trajectory. In 2017, India’s economy grew at the rate of 6.7 per cent, a downgrade from previous assumption of 7 per cent due to short-term disruptions caused by the reforms. India conceded its position to cross-border rival China as the fastest growing major economies in the world. The services sector was the major contributor during the period with a mammoth share of 53.9 per cent of Gross Value Added (GVA) to the GDP, followed by industry that contributed 29.1 per cent, while agriculture aggregated at 17.1 per cent of GVA to India’s GDP.
For the year 2018-19, India’s economy is projected to grow at 7.3 per cent. According to World Bank’s projection, India is set to overtake Britain as the fifth-largest economy in terms of GDP value. India and China’s robust economic growth is unparalleled to any other country in the world, the neighbours are going to remain the fastest growing emerging economies. The overall world economy was growing slightly above 2 per cent but it is projected to rise to 4 per cent, with the markets all across the world on the rise. If the global markets remain steady and political situation, then Indian economy will disposes Germany as the fourth-largest economy by the year 2022.
India’s growth story although remarkable but it is strange. In the last decade, India’s GDP has grown at 116.3 per cent with average growth rate of 8.3 per cent. India’s population is more than 1.3 billion, as the study suggests India’s per capita income increased from $6690 in 2016 to $7170 in 2017. On the other hand, France has a total population of less than 70 million which allows the country to have a better per-capita income based on purchasing power parity, while India’s per-capita income is way less than France. France’s per capita income as of 2017 stands at $43,720, which empowers vast majority of the society to live an affordable life.