Economy Bounces Back, India To Pen Its Growth Story Soon!

A boost to investors’ confidence and fast track clearance of crucial projects is set to put India back on the growth track. With the new government’s prime focus is on developing the manufacturing sector in India, the country’s economy is already showing signs of revival.
“The key fundamentals of economy have turned for better while the GDP would mostly likely grow by six percent in the current fiscal, after sub-five per cent for two consecutive years,” said Rana Kapoor, President of industry body ASSOCHAM (The Associated Chambers of Commerce and Industry of India).

He told that the association expected the new government to address issues such as Goods and Services Tax (GST), as the present government has shown seriousness in tackling issues critical to the revival of the economy.
According to market estimates, foreign investments at the beginning of the year were expected to cross $60 billion level in this fiscal because of the investors’ confidence in Modi government. “See now, the Prime Minister's visit to Japan eliciting promise of $35 billion in five years will be a game-changer for the Indian economy, which will further attract investment from different FDI source countries”, noted Kapoor.
The Reserve Bank of India too in its Annual Report 2013-14 has a positive forecast for the current fiscal year. “The Indian economy could grow in the range of 5% to 6 % in 2014-15 with risks broadly in balance around the central estimate of 5.5%. Signs of improvement in mining and manufacturing activity, expected pickup in investment, improved availability of financial resources to private sector with lower draft of government on financial savings of the households amid fiscal consolidation, improved external demand and stabilising global commodity prices are expected to support recovery,” the report stated.
The report noted that the economy is expected to grow faster than it grew in the previous fiscal year with the government’s focus on key sectors such as mining, manufacturing, construction and trade, hotels, transport and communication. “These four segments account for 50% of GDP compared to about 15% in case of agriculture, forestry and fishing, and electricity,” the report added.
Apart from a stable government at the centre, the apex bank has also attributed the improvement in business and investment climate in the country to considerably lower inflation and an improvement in global growth. “Coincident indicators such as automobile sales, railway freight traffic, cargo handled at ports and foreign tourist arrivals are pointing towards some recovery in the services sector and automobile sales have shown signs of a turnaround,” the bank stated in the report.
Interestingly, the capital markets too have shown signs of revival in the recent times, with Sensex and Nifty scaling high at 293 points and 87 points respectively. Reports suggested that this has primarily happened due to foreign investors are betting big on the growth of the economy and the lower oil prices have given a boost to the investors’ sentiments.