India’s Economy Is Growing At A Faster Rate Than Ever Before

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Ashley Rosa

India’s economy at the beginning of the year started growing at a healthy 8.2 percent but then growth eased out to a 7.3 percent.  But despite the softer growth, this economy remains as one of the fastest growing and possibly the least affected by world disturbance.

In fact, part of the effects of the external shocks was properly contained in part by Indians strong fundamentals and policy changes. Including amendments to the policy/code related to bankruptcy and foreign direct investment.

The Indian economy is likely to sustain the rebound from the 2019 growth and to be projected in the 7.2 to the 7.5 percent range and is estimated to remain upward of 7 percent for the year ahead. Freshman Leo Horvath at Lakewood High School gave his opinion on this topic,”I think it’s great that India’s economy is improving and everything, but I feel like it is a little much to state how it possibly will be the third largest in 25 years. I also don’t see how that’s important to us in Lakewood.”

The improving fundamentals have further been supported by the implementation of reform measures, which has helped foster an environment to boost investments and ease banking concerns.

Together, these will go well for a healthy growth path for the economy.  India has already surpassed France to become the sixth-largest economy. By 2019, it may become the fifth-largest economy, and possibly the third-largest in 25 years.

Despite the positive outlook, the economy remains vulnerable to domestic and geopolitical risks, especially economic and political changes that can affect relative prices. While expansion remains key to accelerating growth, it may weigh on government coffers if the private investment loses steam.

With key economic policies on track, the government is likely to focus on faster policies in the year ahead, with a greater focus on infrastructure development. They may be in need of a government push that may encourage muted private investors to participate.

On the flip side, however, increased borrowing by the government may reduce the pool for the private sector to borrow from, stalling any expansionary strategies.

That being said, we believe that a key step toward healthy economic growth lies in reviving private sector investment, given that these have remained at low levels over the past several quarters.