India’s economic triumph: A chronicle of the fastest-growing major economy

In a resounding testament to its resilience, India has emerged as the fastest-growing major economy globally, surpassing the UK to claim the fifth position after a robust recovery from the shockwaves of the COVID-19 pandemic.

The intricacies of this economic triumph are woven into the fabric of strong growth, global resilience, and optimistic projections that propel India into a new era of economic prominence.

The opening quarter of the financial year 2023 witnessed a staggering 7.8 per cent growth in India’s real Gross Domestic Product (GDP), reaching an estimated Rs 40.37 trillion (USD 484.94 billion).

This surge, compared to the first quarter of the previous fiscal year, marked a substantial leap, exemplifying India’s swift recovery from the economic downturn induced by the pandemic.

The resurgence was underpinned by a combination of factors, including pent-up demand and the widespread coverage of vaccination, instilling confidence in the population.

As the engine of growth, the contact-intensive services sector is poised to be the linchpin of India’s economic revival in the fiscal year 2022-2023.

Fueled by the release of pent-up demand and increased vaccination coverage, the sector is expected to be the primary driver of development in the coming months.

The resilience of the services sector is reflected in the impressive service exports, which stood at USD 164.89 billion for April- September 2023.

India’s prowess on the global economic stage is further underscored by its export performance.

In the first half of the current fiscal year, merchandise exports reached USD 211.40 billion, showcasing India’s adeptness in navigating the intricate dynamics of international trade.

However, challenges loom on the horizon as several of India’s trade partners experience economic slowdowns, potentially affecting the contribution of merchandise exports in the future.

India’s nominal Gross Domestic Product (GDP) at current prices is estimated to be a formidable Rs. 301.75 trillion (USD 3.62 trillion) for the fiscal year 2023-24.

Notably, the first quarter of this fiscal year exhibited an 8per cent growth in nominal GDP, reaching Rs. 70.67 trillion (USD 848.92 billion). Beyond these figures lies a testament to India’s innovative prowess, with the country boasting 115 unicorns valued at more than USD 350 billion as of February 2023 – the third-largest unicorn base in the world.

India’s commitment to sustainable development is evident in its focus on renewable energy. The government aims to achieve 40per cent of its energy from non-fossil sources by 2030.

Moreover, India aspires to attain Net Zero Emissions by 2070 through a five-pronged strategy named ‘Panchamrit.’

This commitment aligns with global efforts to combat climate change, positioning India as a responsible participant in the quest for environmental sustainability.

In recognition of these efforts, India secured the 3rd position in the Renewable Energy Country Attractiveness Index.

India’s appeal as a destination for investments has grown stronger and more sustainable amidst the current period of global unpredictability and volatility.

Prime Minister Modi has a big following from diaspora populations including Indian Americans, many of whom are actively involved in building business and inestment support in India.

“India’s economy is doing much better and its GDP growth is much faster – for which all the credit goes to policies adopted by Prime Minister Modi’s administration. I’m sure all NRIs are hoping we become among the topmost economies in the world by 2030. India is well on its way for that,” said Dr. Sudhir Parikh, a Padma Shri recipient and chairman of Parikh Worldwide Media and ITV Gold.

The record amounts of money raised by India-focused funds in 2022 stand as a tangible manifestation of investor faith in the “Invest in India” narrative.

As India cements its position as the fastest-growing major economy, global investors are increasingly turning their attention toward the diverse opportunities presented by the Indian market.

The McKinsey Global Institute emphasizes the imperative for India to boost its rate of employment growth, aiming to create 90 million non-farm jobs between 2023 and 2030.

The net employment rate needs to grow by 1.5 per cent per annum during this period to achieve a GDP growth target of 8-8.5 per cent. These insights underscore the intricate linkages between employment generation, productivity, and sustained economic growth.

To sustain the growth momentum, the Indian government is proactively investing in capital spending on infrastructure and asset-building projects.

The government’s future capital spending is expected to be buoyed by factors such as tax buoyancy, a streamlined tax system with low rates, a rationalized tariff structure, and the digitization of tax filing.

The Production Linked Incentive (PLI) Scheme for Pharmaceuticals exemplifies a strategic initiative aimed at enhancing India’s manufacturing capabilities.

In navigating the economic landscape, India has witnessed several recent developments that underscore its dynamism. In August 2023, India’s foreign exchange reserves stood at a robust USD 594.90 billion.

The first half of 2023-24 saw a total of USD 21 billion in private equity and venture capital investments. India’s standing in innovation rose significantly, securing the 40th position out of 132 economies in the Global Innovation Index 2023.

PMI Services remained comfortably in the expansionary zone at 62.3 in June 2023.

In September 2023, the gross Goods and Services Tax (GST) revenue collection stood at Rs.1,62,712 crore (USD 19.54 billion).

Cumulative Foreign Direct Investment (FDI) equity inflows to India stood at USD 937.58 billion between April 2000-June 2023.

In August 2023, the overall Index of Industrial Production (IIP) stood at 145.1.
Over the years, the Indian government has introduced numerous initiatives to strengthen the nation’s economy. Notable initiatives include:

The Amrit Bharat Station Scheme, launched on August 6th, 2023, to transform and revitalize 1309 railway stations across the nation.

The Draft Carbon Credit Trading Scheme, introduced by the Ministry of Environment, Forests, and Climate Change on June 28th, 2023.

The Foreign Trade Policy 2023, unveiled on April 1st, 2023, to create an enabling ecosystem supporting the philosophy of ‘Atma Nirbhar Bharat’ and ‘Local goes Global.’

The Production Linked Incentive Scheme (PLI) for Pharmaceuticals, introduced to enhance India’s manufacturing capabilities.

India has not merely weathered the storms of global uncertainties; it has emerged as a beacon of economic growth with a steadfast commitment to sustainable development, innovation, and inclusive growth.

As India navigates the intricate currents of a dynamic global economy, it stands poised to be a key player, shaping the contours of the future.

The diverse tapestry of economic indicators, government initiatives, and developments weaves a narrative of optimism, resilience, and untapped potential, firmly establishing India as the fastest-growing major economy in the world.