India’s Economic Growth Defies Expert Critics, Private Sector Needs To Buck Up Now

On Tuesday, the S&P Global Ratings released its latest report predicting that by 2030, India would surpass Japan and Germany to become the world’s third largest economy. The ratings agency also released a forecast of 7% for the nation’s GDP growth in 2026-27. The ball has been set in motion but there are a few obstacles on the way, mainly the critics who may not mean all that well for the Indian economic structure.

Just as the Nation was preparing for the state election results to be announced in Chhattisgarh, Rajasthan, Madhya Pradesh, and Telangana, the critics of the Indian economic policy kept harping about various factors holding us back from achieving our full potential. They talked about the low GDP growth, overstated growth, mis-measured growth, K-type growth, and what not! This cacophony of blind criticism reached its zenith just as the news came out that India had achieved 7.4% economic growth in the first six months of the fiscal year 2023-24. The silence was as deafening as it was inside the Ahmedabad Stadium, when Virat Kohli got out, leaving the Indian batting order high and dry during the crucial final match.

However, it seems that the Chief Economic Adviser V. Anantha Nageswaran isn’t still happy. He wants the Indian growth rate to be faster and for that, his advise to the younger generation is to increase their productivity in daily life. He said on Friday, “There is no growth without productivity, there is no productivity without a healthy population and there is no good health without healthy eating and physical activity. And that is the lesson that we need to tell our younger generation: less screen time, less junk food and more physical activity.” He called it his “message for 2024.” Pointing out the optimum effort made by the public sector in India, Nageswaran said that the main catalyst to spur India’s economic dream run further would be the private capital formation. He mentioned that the private sector had enough resources at its disposal, which could accelerate the national economy’s growth rate even more.

At present, India is the world’s fifth largest economy, standing behind the US, China, Germany and Japan. Last year, it has already replaced the UK to become the world’s 5th largest economy.

The report also informs that whether or not India is able to transform itself into the next big global manufacturing hub would decide whether this growth story would continue unhindered or not. It says, “A paramount test will be whether India can become the next big global manufacturing hub, an immense opportunity. Developing a strong logistics framework will be the key in transforming India from a services-dominated economy into a manufacturing-dominant one.”

(The writer works as Mortgage Specialist with Andromeda, India’s largest loan distributor.)