With 15 months remaining at the center, the Narendra Modi government has something to celebrate as the International Monetary Fund projects that at 7.4%, India will emerge as the fastest growing economy in 2018, leaving behind China at 6.6%. The projection comes ahead of Prime Minister Modi’s address to the delegates at the World Economic Forum in Davos, Switzerland.
The IMF predicted that India’s GDP can grow up to 7.8% in 2019. This comes as a respite to the current BJP-led government as demonetization and Goods and Services Tax (GST) were heavily criticised. India’s own statistics office had predicted that the country’s economy will only grow at 6.8% fiscal in 2018, which is the lowest in the BJP’s three-year term in the office. According to the World Bank, India has also climbed up on the pecking order to 100.
However, in the WEF’s annual Inclusive Development Index, India performed poorly as it was placed at 62 far behind China (24), Pakistan (42), Sri Lanka (40), Bangladesh (34) and Nepal (22). The index rests on three pillars – growth, development, inclusion and inter-generational equity. It also depends upon other factors such as living standards, environmental sustainability and protection of future generations from indebtedness. The WEF has urged the countries to stop relying on GDP as a measure of development as it promotes short-termism and inequality.
Prime Minister will be addressing global corporate chief and executives and Indian bigwigs such as Tata Group chairman N Chandrasekharan, Wipro’s Azim Premji, ICICI Bank CEO Chanda Kochhar and SBI chief Rajnish Kumar at Davos.
With the last annual budget on its way, will the government be able to recover its 3.2% fiscal deficit?