India is Expected to Become the World’s Fastest Growing Economy
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India is Expected to Become the World’s Fastest Growing Economy

  • Highlights

  • India is expected to grow at 7.5% in the next two years

  • Resource utilization and economic reforms are propelling growth

  • Increase of women participation in the workforce expected to boost GDP

India’s road towards becoming one of the world’s largest economies seems to be clearing up. Amidst several challenges such as falling value of the rupee, trade war between the US and China, India seems to be silently triumphing on the economic front, expected to clock in a growth rate of 7.3% this year, according to the World Bank.

The international financial institution expects India to maintain its growth in to the next few years as well and has forecasted a growth rate of 7.5% for the next two years, making it the one fastest growing economies in the world, surpassing China whose growth rate seems to be slowing down. Where China showed a growth rate of 6.9% in 2017, it has dropped to 6.5% in 2018 and is further expected to plummet to 6.3% in 2019 and reach 6.2% by the end of the decade in 2020.

The realization of these predictions depends upon a number of factors. Here is a list of things that might work in favour of India’s projected economic growth:

Growth through resource utilization

India has a lot of growth potential as its economic growth has started at a low level of resource utilization as compared to countries like China whose resource utilization is quite high. If the country is able to raise its GDP growth through better employment of excess resources with existing technologies, it will definitely help boost the economy.

Economic reforms

The Indian government has been praised for undertaking several economic reforms such as the implementation of GST, crackdown on shell firms, boosting affordable housing and bank recapitalization.

International country credit monitoring agency, Aon has credited India for sticking to major economic reforms like reduction of taxes on import and export, loosened control on foreign investment and removal of price controls.

Participation of India’s female population in the work force

The female half of India’s population has been a vastly untapped resource in the Indian economic story. Despite women closing the higher education gap, their labor force participation rate remains low. However, things are slowly changing and it’s estimated that a 10% growth in women’s participation in the labor force will add USD 700 billion to the GDP by 2025.

Evolution of NBFCs

The evolution of non-banking finance companies (NBFCs), post-2008 financial crisis, and their contribution to the financial sector is a big positive for the Indian economy. According to CRISIL, NBFCs are expected to witness a CAGR of 18% for the next two and half years, increasing their share in total credit to 19% by 2020.

NBFCs, through their innovative offerings, have removed bottlenecks related to funds for SMEs, the growth engine of the Indian economy. They are also offering home loans, business loans, personal loans, and loan against property to individuals at competitive interest rates, thus playing an essential role in uplifting the economy as a whole.

For instance, pre-approved offers from Bajaj Finserv on a gamut of loans including home loan, personal loan and business loan make it easy to avail finance. To know your pre-approved offer, just share a few basic details.

Thus, the economical future of the country looks positive and bright in the days to come. With optimism returning to the markets, India is on its way to becoming a leading economy.

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