Bigger, Super, Stronger! The developing Indian Economy could top the five largest economies of the world by 2025 as per the Economists prediction. India, a developing country is leaving no stone unturned to spur its economic growth. Over the past decade the Indian economy has experienced swings and inflation that has plunged the country to adapt centrally planned economic strategies. That identifies the diverse country as the biggest economy after the economic giants Russia, China and USA. Despite this India still remains as an outperformer as per the revised forecast by CRISIL – India’s Gross Domestic Product (GDP) growth from 7.3 percent to 7 percent for the financial year 2023. Goldman Sachs has also backlashed the fastest-growing economic title of India in the previous fiscal years owing to India’s borrowing costs that are higher compared to the benefits. Just two months away from AY 2023 and experts are still uncertain about Indian economic growth in 2023.
The Indian Economic trends for 2023 would majorly concentrate on balancing the debits and credits, examining the economic regulations, pandemic recovery, privatisation /rise in the manufacturing and business sector, IT sector, revival in agriculture sector, the Indian politics, central government and the widening digital services and infrastructure. Experts suggest monitoring domestic demand in the first half and strengthening the net exports will retain a positive economy. Beside this the Trade, economic report, October 2022 of central government suggests a positive momentum in Indian economic growth with the increase in housing sales that registered a significant sale in the top 8 cities and RBI’s efforts in controlling inflation.
So, What? Economic Trends India looks forward to adapting in 2023. Let’s rely on Gold Sachs’ big remark about Indian economic potential and the factors it needs to reach that potential.
Gold Sachs estimated factors –
A. Investment to GDP ratio
B. Labour force Participation
C. Productivity or TFP (total factor productivity)
D. Human Capital Index
A. Investment to GDP ratio: The GDP ratio is defined as a measure of the amount of money that domestic businesses invest within their own country. India needs to increase its GDP investment ratio to boost its economy. Gold Sachs suggests this will boost the potential growth by 50bp.
B. Labour force Participation: Labour force participation is the employment in any country’s economy. It is an important pillar of the Indian economy that represents the force available for the production of goods and services. India is emerging as the global manufacturing sector with an estimated 25% significant economic output by 2025. Gold Sachs suggests this to boost the Indian economy 100bp.
C. Productivity or TFP (total factor productivity): TFP is one of the most effective ways to predict the economic outcome. The Indian TFP of the last two decades was the average. Gold Sachs suggests improvement or increment in the Indian TFP to boost the economy.
D. Human Capital Index: A report prepared by the World bank. Human Capital Index measures the country best in preparing the economic and professional potential of its citizens. This Index ranges from 0 to 1 with 1 reaching maximum potential.
All these four factors estimate the Indian Economic trends for 2023, but again as history suggests the Indian politics is a regulatory force that has a humongous impact on the Indian economic developments. The Made in India Initiative of the central government is already a booming economic trend that is transiting the service based Indian economy to an industry and production driven economy. Considering the volatile economic scenario of India, it is almost impossible to predict a solid economic trend, activities or outlook that would boost the Indian economy. Although there is an optimistic approach towards the Indian economy the forecast is a subject to debate. Monitoring the key challenges of the Indian economy like the inflation and INR depreciation against US dollar economic uncertainties can be overcome. Also, Indian economic development can be triggered by understanding the global trends such as Demographics, Digitalization, Decarbonization and Deglobalization of countries like Russia, China and USA, the strongest competitor of India. This needs a careful consideration of research study.
For now, we are almost on the verge of November ending. So, in a nutshell the Indian economic trends will vary as per the different reports and predictions from the economist and the experts. For now, research and study suggest Gold Sachs factors will be the new Indian economic trend of 2023.
~Suchita Sail Thanks!
Just another Random thoughts 😁 