Prime Minister Narendra Modi told a gathering of German and Indian businessmen at an event organised by Nasscom that no place on earth offered the potential for creation and production like India at present. It may seem sheer hype to many who take a dim view of the situation in the country poisoned by violence and sectarianism. Their scepticism is stressed by the fact that the recently released India Rural Development Report says that 7% of the rural population is” very poor”. But an UNCTAD report presents a bright picture about India’s economic indicators. It says that the country’s economy is expected to grow at 7.5% this year, driven by domestic demand and consumption as well as the improved fiscal position due to the lower oil import risk. Asia as a whole, said to be the most dynamic region and is estimated to account for almost half of the total global growth in 2015.
What is all the more encouraging is that the Indian economy is expected to grow faster than other major emerging countries, according to IMF in its latest World Economic Output Update. The country’s growth, according to this report is expected to strengthen from 7.3% this year and last year to 7.5% next year. The IMF attributes the spurt to recent policy reforms, consequent rise in investment and lower commodity prices. As against it, growth in China is likely to decline to 6.8% of this year to 6.3% in 2016. All this may be music to New Delhi’s ear but the glaring fact of the vast import-export gap between India and China can hardly be lost sight of. The elephant is still overawed by the dragon.