As the world battles a global recession, with all the major economies struggling to cope, India continues to defy the odds, with its economy outperforming on all fronts. In what can be called a true manifestation of the 'India Shining' campaign of the NDA almost 20 years ago, India, under the leadership of Prime Minister Modi and the BJP, has gained momentum and delivered on multiple counts, projecting itself as the next big thing to watch out for. This comes as the Modi-led BJP completes 9 year in power.
Here are 6 major parameters where India’s economic performance surpasses expectations and paves way for a resilient surge in the future:
1) GDP Growth
Recently, Central Government’s National Statistical Office (NSO) revealed India's Gross Domestic Product (GDP) data for the January-March quarter (Q4,FY'2023). In the quarter, India's economy sees significant growth and merrier-than-estimates. In Q4,FY'23, GDP growth is at 6.1% compared to 4.4% growth rate witnessed in Q3. Street had expected a growth of 5.5% during the 4th quarter of FY'23. Overall, the growth in FY'23 fiscal is better-than-expected to 7.2%.
The GDP numbers indicate that the Indian economy has emerged as an outlier after maintaining the growth rate at a higher level as compared to global economies following the breakout of the pandemic. Further, the growth continues to be aided by strong domestic demand coupled with strengthening activity in the services sector.
"In fact, all emerging trends indicate that India's economy continues to be on an expansion trajectory.
2) Record-high GST Collections
On Thursday, the Ministry of Finance revealed that the monthly GST Collection for the month of May was a whopping Rs 1,57,090 crores, registering a 12% rise on an YoY (Year-on-Year) basis. This comes as the monthly GST Collections had peaked in April 2023 with Rs. 1.87 lakh crore.
With the clocking of this data, India has now seen GST revenue exceeding Rs 1.4 lakh crore per month for the 14th consecutive month, even as economies over the world still struggle to recover from the post-pandemic distress.
Further, the Ministry also revealed data showing that revenue from import of goods was 12% higher and the revenues from domestic transactions (including import of services) are 11% higher than the revenues from these sources during the same month last year.
These figures are not only indicative of the robust economic performance of the country, but also of the sustenance and resilience shown in its performance as a result of appropriate policy decisions.
3) Expanding Manufacturing Sector
With the S&P Global Manufacturing PMI (Purchasing Manager’s Index) reaching a 31-month high of 58.7 in May, the Indian manufacturing sector has now continued to show a robust expansion. The PMI has now remained above the key level of 50 for 22 consecutive months, indicating sustained growth in activity.
In a statement, S&P Global highlighted the positive developments seen in May. The demand conditions exhibited remarkable strength, with factory orders experiencing the fastest growth since January 2021. This surge in sales led to increased production, employment, and quantities of purchases. Furthermore, supply-chain conditions improved, resulting in a record accumulation of input inventories.
The report also noted a significant boost in international sales, driven by exports, leading to the quickest expansion in this area in six months.
4) Outstanding Export Economy
Ministry of Commerce and Industry’s Data in April revealed that India’s overall exports (including merchandise and services) are estimated to have increased by 13.84% to a record $770.18 billion in 2022-23.
Despite global economic slowdown, services exports were estimated to have grown by 26.79%, as a strong trade performance on the services front helped boost the overall export numbers in 2022-23. As per the data, 17 of the 30 major export sectors grew during the last financial year. Despite recessionary trends everywhere, the growth expectations were not only met, but even surpassed.
The strong performance of the export economy, bolstered by a variety of factors, were one of the biggest successes of the India story, even as the economic spill-overs of the Ukraine-Russia war had devastating consequences elsewhere.
6) Robust Forex Reserves
Reserve Bank of India (RBI) data in May revealed that India's foreign exchange reserves have jumped to a 11-month high. India's import cover rose by about $7.2 billion to nearly $596 billion (week ending May-5). The data showed India's forex reserves are not far from the record high of $645 billion, which was reach in October 2021.
This was commendable considering that India's reserves had declined significantly after the Russia-Ukraine war. The Reserve Bank of India had been deploying its forex kitty to defend the rupee when investors sheltered into the U.S. dollar.
India's growing forex reserves contrast with Sri Lanka, Pakistan, and Bangladesh, where declining forex reserves are making import payments difficult. This clearly not only showed a growing disparity in Asia, but also India's prominence within the region and its ability to keep a healthy forex currency reserve to pay for its imports and keep the rupee stable.
6) Lower Inflation
Ministry of Statistics Data released in May revealed that India’s retail inflation moderated to an 18-month low of 4.70 per cent in April. With this, the consumer-price index (CPI) based inflation continued to remain within the Reserve Bank of India’s (RBI) tolerance band of 2-6 per cent for the second consecutive month.
This comes as the economic effects of the Russia-Ukraine war and ensuing sanctions have seeped troubles and inflationary tendencies worldwide, even as essential commodities everywhere have seen a sharp rise in prices. Despite claims to the contrary, when seen in the backdrop of the global scenario, India’s inflation has been very much in the comfort zone of the Central bank, surpassing expectations from global quarters.
While the aforementioned indicators provide only a glimpse of the important parameters, it is undeniable that India's economic performance consistently exceeds expectations, both domestically and globally, across all fronts and on multiple occasions.
Independent reports have credited the government for facilitating the splendid economic performance even as India continues to face sharp challenges from its Asian rival China’s mega economy, and other pressing domestic and international issues. Certain pessimists and detractors, despite being economists, would continue to make sustained efforts in downplaying these achievements; however, numbers do not lie, nor does the outstanding and commendable appraise that Indian economy’s performance continues to receive from all quarters.
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