Budgets that guided India’s rise as an economic power
Last week, the Indian stock market surpassed the Hong Kong stock market to become the fourth largest in the world in terms of market-capitalisation . This is one of the many feathers in India’s cap over the last decade in which India has witnessed unprecedented economic growth and international prominence . In September 2022, a confident Bharat surpassed the United Kingdom to become the fifth largest economy. We are soon poised to become the world’s third largest economy and a $35 trillion economy by 2047. Contrast this to a decade ago when India along with a few other countries was dubbed the “Fragile 5” owing-to runaway inflation . In fact, in 2013, India had dropped one place to become the 11th largest economy showing that while the global economy was recovering and growing from earlier economic headwinds , the Indian economy was continuing to face challenges. This decade-long journey since then has not been easy and a key decisive factor has been the quality of leadership at the very top.
The digital economy, comprising information technology (about six million jobs), electronics manufacturing (about three million jobs), and telecom (about a million jobs) employs more than 10 million people in India today. In addition , three times as much indirect employment is generated by the digital economy.
One key differentiator has been the visionary budgets implemented over the last decade that have meticulously laid the foundation for a robust economic bulwark , poised to withstand challenges and propel India towards sustained growth and prosperity . The emphasis on capex-driven growth, coupled with a new policy framework that made infrastructure development central to the growth roadmap, has ensured that the resources we have are being deployed to maximise social and economic welfare. Increasing the outlay for the health sector by a whopping 137%, new schemes in the agriculture sector and a National Education Policy with financial commitments have been guided by this thinking.
The Gross Domestic Product growth rate has recorded an impressive 7.2% in 2022-23, and the nation is set to surpass pre- pandemic levels by a remarkable 17.2%. In the realm of international trade, there is growing interest from countries across the globe in signing free trade agreements with India. One reason for this is the effort taken to make Indian goods and services competitive by bringing down the cost of business – lower logistics costs , dedicated freight corridors and a digital economy have further made ease of doing business a reality.
India’s digital prowess is exemplified by the astounding success of the digital economy with UPI transactions crossing the 100 billion mark in the 2023 calendar year, closing at 118 billion, and marking a 60% growth compared to 2022. With daily UPI transactions reaching a staggering 387 million in December, the platform is expected to surpass the transaction volume of dedicated payment technology corporations, underscoring India’s rapid transition towards a cashless economy.
The government has also deployed the Public Sector Enterprises (PSEs) more strategically . This has played a pivotal role in this economic surge , with one out of every three PSE stocks in the stock market delivering over 100% returns in 2023. The push for infrastructure capex, defence indigenisation, and the Make in India initiative, have propelled PSE entities to remarkable growth.
Foreign investments, both in equities and bonds, surged in 2023, reflecting confidence in India’s robust economic fundamentals. Leaders of India Inc. have expressed optimism and credit the political leadership for instilling hope and confidence. International organisations predict a glowing future for India’s economy. The International Monetary Fund (IMF) expects India to become a $5 trillion economy by 2028, while JP Morgan envisions India becoming the third-largest global economy by 2027, hitting $7 trillion by 2030. Domestically, the Reserve Bank of India (RBI) has upgraded growth forecasts to 7% for 2024, further substantiating the positive momentum . In the face of global economic challenges, India, under Prime Minister Narendra Modi’s leadership, has not only weathered the storm but also emerged as a beacon of economic resilience and growth.
Our vision is set on emerging as a responsible global leader while prioritising sustainable industry, infrastructure, and manufacturing. From strategic geopolitical alignments to robust economic indicators, Bharat stands on the cusp of a new era , solidifying its position as a global economic powerhouse. With the interim budget announcement for the upcoming financial year due soon, the nation is moving forward.