Indian Economy = stirring a recipe to become the world’s third largest economy

As we swift through history, we reckon that every country/nation undergoes dramatic cycles of prosperity establishing themselves as a superpower/developed country.AND… this cycle continues to revolve over and over time. Who were once leaders would now be struggling and who were struggling would now be thriving, synonymous to the karmic cycle. 

 

Post WWII America emerged as the superpower of the 21stcentury replacing Russia. Japan was too once a superpower thanks to their superior innovation standards that were a benchmark of supremacy in the field of innovation. Within about three decades China has witnessed metamorphic changes, promoting itself from a developing economy to almost a developed economy. Next in the race stands India, bolstered by a strong foundation that has been a work in progress since the last decade. It is possibly on the verge of an inflection point of growth as one of the world’s largest economies, a successor to China and the US. The current geopolitical situations have rendered a new world order and India is one such country that is believed to gain from the new developments.

 

Going back to the 2000s 

 

As globalization flared across the world, India was acknowledged as a nation that had access to rich and resourceful skilled labour pool that was educated, avid English speakers and did not demand heaps of salary v/s their Western counterparts. This gave a rise to India as a nation that specialized in offering a gamut of IT services. 

 

BUT TODAY…

 

India seeks to position itself as a manufacturing and export partner to the world, offering the China+1 benefit to the world. 

 

India is believed to be one of the strongest contenders for friend shoring purposes as nations around the world diversifytheir supply chain and manufacturing partners away from China. India is touted to become the office and factory of the world in the coming years due to a plethora of reasons. 

 

As a nation, India had taken strides within the last decade with its multifarious initiatives towards development of the economy to boost productivity in of all areas of the economy.

 

Let’s see what have a deeper look at these developments.

 

The development of the India Stack, a digital infrastructurereinstates India’s response to leveraging technology to algin and streamline multiple activities (Aadhar identifications, to payment of bills, to eKYC’s etc) for easy access to various records and documents. India Stack has stimulated digital as well as financial inclusion for the Indian population (Jan Dhan; OCEN).

 

SME’s and MSME’s that attained survival of the fittest post introduction of GST are provided with access to creditfacilities to catapult productivity and growth of businesses, in turn boosting the Indian economy!

 

India has geared itself towards catapulting its infrastructural activities via increased public and private partnership led CAPEX spending on physical infrastructure (expansion of roads, railways, ports, airways), industrial/ institutional andresidential infrastructure since the last few years, propelled by schemes like NIP, PM Gati Shakti , ULIP and NaBFID. 

 

They aspire to build connectivity between states of the country, between ports and railways, ports and airways, roads to railway and all to warehouse facilities in order to enforce seamless logistics (with access to real time data for efficient and productive decision making regarding infrastructural developments) with the mission of reducing their excessively high logistics costs (NLP initiative). 

 

All these initiatives are likely to impel employment astronomically leading to increased customer demand and spending, supporting the economy.

 

In totality, India envisions itself as a nation that seeks to leverage technology as its backbone in order to proliferate connection, standardization and formalization between alleconomic activities!

 

A creation of an entire ecosystem that is interconnected to nurture a sustainable and self-sustaining economic activity.

 

India is bolstering industries (private companies) towards achieving manufacturing growth and self-dependence by offering incentives via their PLI scheme, amplifying the Make in India initiative. Around a mix of 15 sectors are being sponsored by the PLI scheme such as telecommunication (to make India 5G friendly), semi-conductors, solar modules,mobile phone, electronics, automobiles, pharmaceuticals,pharma APIs, IT hardware and products and much more.

 

Public capex is also directed towards the telecom industry, defense industry and manufacturing to achieve self-sufficiency as a nation as well as bolstering their export market via FTAs thanks to support from private sector capex. This initiative advocates the creation of productive economic activity, stimulating both public, private and FDI investments towards development of sectors, industries and eventually the economy. With the ease in regulations and land related regulations and processes, the government seek to encourageFDI inflows for development and creation of a manufacturing hub unique to India via FTAs.

 

The ONDC scheme seeks to abolish the monopolies of giant e-commerce players by inviting SMEs and MSME’s in the market, equipping them with an opportunity to compete alongside the giants and incumbents. India is home to the largest youthful population (major consumer market) today,that is connected to the internet and avid users of technology.The government is promoting skilling initiatives for digital inclusion of deprived youthful population to make them ready for the digital job market. Hence providing the world with skilled employees and a resourceful labour market.

 

In addition India is very serious towards climate change and seeks to reduce its dependence on fossil fuel based energy. They are aggressively investing in creating an infrastructure and building extensive capacities to kickstart energy generation from renewable energy resources such as solar power, wind power and a potentially awaited hydrogen basedenergy generation. An increase in energy generation from renewable energy will lead to a plunge in the country’s trade deficit as its reliance on oil and gas will decline. Hence the funds can be deployed in the economy towards efficient businesses practices to boost the economy. India seeks to become net- zero by 2070, decelerate its emission by 45% by 2030 and generate 50% power from non- fossil fuel-basedresources.

 

One thing is for sure, India has embarked on a journey, towards creating an ecosystem, stimulating business activity,so they can contribute their share towards the ultimate development of the economy. In addition India is leveraging its youthful population base to achieve productivity and efficiency to achieve India’s economic mission and vision. Thus, ultimately helping India to attain the position of the third largest economy in the world in the coming years. India is truly developing itself as market that has the potential toflourish, given the opportunities for the potential wealth creation by public and private companies once their investments in developing the country materialize. Surely everyone will want to get a slice of this market.

Disclaimer: The opinions expressed within this article are personal opinions of the author. The facts and opinions appearing in the article are views of the author in general and the author does not hold any legal responsibility or liability for the same.)