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OPINION: India is a Success Story

Author: Balbir Punj
Publication: OneIndia.com
Date: May 5, 2023
URL:    https://www.oneindia.com/feature/india-is-a-success-story-3556270.html

While poisonous darts are being exchanged between competing political rivals in the wake of elections to Karnataka assembly, India is scripting a success story on the economic front, which unfortunately isn't a part of national discourse. All old records are being broken, and new milestones are being hit in various sectors of the economy.

The monthly collections for Goods and Services Tax (GST) for March are at an all-time high of ₹1.87 lakh crore. While a part of the increase may be because of improved compliance and seasonality- March generally sees a higher tax collection because it is the last month in the fiscal year- GST collections are surely reflective of India's improving economic health as well. Increased economic activity implies wide-spread prosperity, more employment opportunities and improved standard of living for various strata of society.

The unprecedented increase in GST collections, when read with other indicators, suggests that the Indian economy is surging ahead at a time when the global economy is facing a lot of uncertainties. According to the Bloomberg, India has a zero probability of recession in 2023, making it the only such country on the list. The International Monetary Fund has predicted that India will be the fastest-growing economy in 2023.

Other countries that have the highest probability of recession: - the United Kingdom: 75 per cent, New Zealand: 70 per cent, the US: 65 per cent, France: 50 per cent, Canada: 60 per cent, Italy: 60 per cent, Germany: 60 per cent, Japan: 35 per cent, Russia: 37.5 per cent, Australia: 40 per cent, South Africa: 45 per cent and China: 12.5 per cent. Isn't just amazing !

Here are some of the indicators that provide convincing reasons for such an optimistic outlook. According to a monthly survey, manufacturing activities in India accelerated and touched a four-month high in April, boosted by robust new business growth, mild price pressures, better international sales, and improving supply-chain conditions.

India's overall exports (including merchandise and services) are estimated to have increased by 13.84 per cent to a record $770.18 billion in 2022-23, while overall imports are expected to have surged 17.38 per cent to $892.18 billion, over the previous year, according to official data.

India's forex reserves jumped by USD 6.3 billion to USD 584. 755 billion for the week ended April 7, a nine-month high, the RBI said on April 14. Foreign Currency Assets increased by USD 4.740 billion to USD 514.431 billion.

The auto industry logged of 331,747-unit sales in April against sales of 290,300 units a year ago, registering a growth of 12.9 per cent. Retail sales stood at 285,700 units against April 2022-23 sales of 275,500 units, registering a growth of 3.5 per cent.

India's coal production has made a new record for highest-ever production during April this year, achieving 73.02 million tonnes (MT) with a yearly growth of 8.67 per cent. In April last year, the total coal output was 67.20 million tonnes.

Sales of organised retail segments during 2022-23 increased 34 per cent compared to those in the pre-pandemic FY 20, largely driven by quick service restaurants, sporting goods and electronics, a report by Retailers Association of India (RAI) has said.

The rupee has outdone all but one of its Asian peers, Indonesian rupiah, this month. A resumption of overseas investment flows into Indian stocks over the past couple of months has propped up the rupee, resulting in the local unit performing better than 10 other Asian currencies so far this month.

Here is yet another trailblazer story- a success of Modi's industrial policy, giving huge subsidies and tariff protection to select companies to create factories with global scale economies. In India, in past such policies have resulted in corruption and total waste. But not this time.

In 2017-18, cellphone imports $21 billion were second only to oil imports. Domestic production was small. The net sectoral trade deficit was staggering $20 billion. But then a miracle took place. Exports of cellphones and components burgeoned, while imports dropped steeply. In March 2023, exports actually exceeded imports by $239 million. This is an amazing performance, by any standards.

India's dependence on foreign vendors for import of arms is declining. The Government has undertaken a mix of policy initiatives that tap into design and manufacturing capabilities of public enterprises, large business conglomerates and even start-ups. Foreign armaments purchases declined 11 per cent in the recent past, as the government widened the list of items for indigenous procurement while setting ambitious targets for defence exports.

One not-so-talked-about success story in recent years is of sugar exports from India. Between 2017-18 and 2021-22, these have soared from $ 810.9 million to $ 4.6 billion, and could cross $ 5.5 billion-or Rs 45,000 crore this year.

In "Mann ki Baat" in August 2020, Prime Minister Modi had given a clarion call on "Rebranding the Indian Toy Story" and emphasized on the availability of right kind of toys for children, using toys as a learning resource, designing of toys based on Indian value system, Indian history, and culture to strengthen domestic designing and position India as a global manufacturing hub for toys.

The PM's call was not just a homily. It was followed by a number of interventions by the government. India's toy exports rose to more than six times in April-December 2022 as compared to the same period in 2013. The import of toys has dropped by 70 percent in the last three years. The exports, on the other hand, have jumped by 61.38 per cent over the same period.

In 2016, Prime Minister, Modi launched the Start-up India initiative for building a start-up culture to transform India into a nation of job creators instead of job seekers. A 19-point agenda was the guiding document for this initiative, including a ₹10,000 crore fund for growing the domestic venture capital industry and a Start-up India Seed Fund. In parallel, programmes and policies were also created to increase the capacity of the manufacturing sector to bring its share of the economy's output from 17 per cent to 25 per cent by 2025.

This continued focus towards moulding India into becoming a pioneer in technology and innovation had yielded results. India's rank in the Global Innovation Index moved up to 40 in 2022 from 46 in 2021. MSME growth too has doubled in the past two years.

Is it jobless growth? Here are some of the findings of National Sample Survey Office on March 6, pertaining to the Periodic Labour Force Survey (PLFS) conducted during the agricultural year 2021-22 (July-June) and calendar years 2021 and 2022.

There was a 58 million increase in jobs between 2019 and 2022. The two years are chosen to conform to a pure pre-Covid and a pure post-Covid estimate. Jobs for women increased by 28 million or by 25 per cent over the 2019 level; jobs for men increased by 30 million.

While the economy is in the pink of health, inflation too is under control. Retail inflation eased to a 15-month low of 5.66 per cent in March, slipping below the upper threshold of the Reserve Bank of India's medium-term target, largely due to base effect and lower food prices including cereals and milk.

India now has an established track record of high growth. In the decade leading up to the Covid -19 pandemic, India's average annual GDP growth was 6.6 per cent compared with 6.3 per cent in the preceding decade. In fiscal 2023, India is seen growing at seven per cent, making it the fastest-growing large economy.

Given current growth dynamics, India should become a $5 trillion economy by fiscal 2029. However, one can't factor in several variables such as climatic changes, sudden vicissitudes in global scenario or wild fluctuations in commodity prices. At present, there is a significant sense of optimism around India. Notwithstanding many prophets of doom, at home and abroad, India's present, and future look optimistic.


-Mr. Balbir Punj is a Former Member of Parliament and a Columnist. He can be reached at: punjbalbir@gmail.com            

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