The Indian economy will see an over three-fold expansion at $7.25 trillion by 2030 and clock an average growth rate of 8 per cent over the next 15 years, Niti Aayog vice chairman Arvind Panagariya said on Sunday (April 24).
In a presentation made at its Governing Council meeting -- chaired by Prime Minister Narendra Modi and attended by 28 state chief ministers -- in New Delhi on Sunday, the government think-tank projected the size of the Indian economy.
"Our base GDP is large. If we grow at an 8 per cent average rate for the next 15 years, our GDP will be Rs 469 lakh crore by 2030 (around USD 7.25 trillion)," Panagariya told reporters.
The country's GDP stood at around $2.11 trillion in 2015-16, he said.
He was briefing the media after the meeting about the Aayog's detailed presentation on a 15-year vision, 7-year strategy and 3-year action plan for the country.
When asked whether the Aayog has given up hopes of double-digit growth, he said, "We could grow at 8 per cent in rupee and 10 per cent in dollar terms."
Elaborating further on this, Niti Aayog CEO Amitabh Kant said this is an average growth rate as it could not be the same in all years.
Panagariya explained, "(In my presentation) I said in 1999-2000, we were Rs 46 lakh crore (economy) at 2015-16 prices. We added Rs 91 lakh crore to this by 2015-16. We came to Rs 137 lakh crore by 2015-16... a little lower than USD 2.1 trillion."
On the Prime Minister's pitch for having simultaneous elections and changing the financial year from April-March to January-December, Panagariya said the prime minister has said it is good to change the financial year to January-December because it coincides with harvest season and is good from farmers' perspective.
He said the prime minister has asked the states to think about changing of financial year to January-December.
On these matters, Kant said, "These were the suggestions made by the prime minister. One was simultaneous elections and other was financial year. We are a very large country. States also matter. They need to give their inputs."
On state's performance, the Niti Aayog CEO said there are 100 districts in the country which have not performed well on various parameters in the area of health, education, electricity. If these 100 districts' performance can be improved then the country can progress well, he added.
At the third meeting of the Aayog's Governing Council on Sunday, Kant also apprised the gathering about the work done by Niti for transforming the economy and cooperation with states in the sectors of education, health, infrastructure etc.
He also asked the states to treat Niti as their outpost in Delhi.
Panagariya gave an outline of the draft Action Agenda, prepared with inputs from the states, which was circulated at the meeting.
In his presentation, he put forth over 300 specific action points that had been identified, covering the whole gamut of sectors.
The period of the Action Agenda coincided with the period of the 14th Finance Commission's award. This gave stability to the funding estimates of both the Centre and states.
He solicited the inputs and support of the states in taking the vision forward.
Revenue Secretary Hasmukh Adhia made a presentation on the Goods and Services Tax (GST), explaining the benefits of the system and the way forward. He urged the chief ministers to expedite the enactment of State GST Act (S-GST).
Madhya Pradesh Chief Minister Shivraj Singh Chouhan made a presentation on how to double farmers' income. He touched upon areas such as irrigation, technology generation and dissemination, policy and market reforms, e-NAM, livestock productivity etc.
Niti Aayog's member-agriculture Ramesh Chand also elaborated on some of the steps needed for doubling farmers' income and spoke of the various elements of the Pradhan Mantri Krishi Sinchai Yojana, such as 'Accelerated Irrigation Benefits Programme', 'Har Khet Ko Pani', and 'Per Drop, More Crop'.
The Niti Aayog's document titled "India 2031-32: Vision, Strategy and Action Plan" says "new India awaits two wheeler or car, air conditioner and white goods for nearly all".
According to Panagariya's presentation, India's per capita GDP will rise by Rs 2 lakh in 2031-32 from 2015-16.
India's per capita GDP is currently Rs 1,06,589 and will reach Rs 3,14,776 in 2031-32, it added.
India's urban population will rise by 22 crore in 2031-32 to 60 crore from 2011's figure of 37.7 crore.
Central and state expenditure will rise by Rs 92 lakh crore in 2031-32 to Rs 130 lakh crore from Rs 38 lakh crore in 2015-16.
Based on the recommendations of the Foreign Investment Promotion Board in its 244th meeting held on March 29, 2017, the government has approved six FDI proposals and recommended one proposal for the Cabinet Committee on Economic Affairs (CCEA).
1 - PMC Group International - Approval has been sought for: (i) undertaking foreign investment upto 100%, through a newly incorporated Indian company M/s PMC YM-Pharma Private Limited and (ii) PMC YM-Pharma would purchase the manufacturing facility of an existing Indian pharmaceutical company, Yegna Manojavam Drugs and Chemicals Limited.
2 - Enaltec Labs Private Limited - Post facto, approval has been sought for issuance of CCPS to Medtech Limited, UAE, in February 2012, and subsequent transfer of such CCPS by Medtech to Scitech Limited, UAE in March 2013.
3 - Powervision Export and Import India Private Limited - has sought approval for foreign investment by a Bangladeshi citizen, which is an existing shareholder and director of the company.
4 - Crown Cement Manufacturing India Pvt. Ltd. - Approval has been sought for foreign investment from a Bangladeshi entity, M.I. Cement.
5 - Bigtec Pvt. Ltd. - Bigtech, an Indian Company, has sought post facto approval for a swap of shares to its holding Company, Bigtec Innovations Private Limited (BIPL), also an Indian Company, in the share exchange ratio (for every 1 share of Bigtec, 2 shares of BIPL were allotted).
6 - Entrepreneur India Media Private Limited - Approval has been sought for undertaking the additional business of publishing scientific and technical magazines.
Another Proposal of Gland Pharma Limited has been recommended for CCEA approval.
Despite growing uncertainties on global growth, the World Trade Organization (WTO) has moved up its forecast on the growth in volume of global trade from 1.3% in 2016 to 2.4% in 2017 with the range expected to vary from 1.8% to 3.6%. What is even better is that the multilateral organization expects the trade recovery to continue in 2018 with the growth rates moving up further in the 2.1% to 4% range
The large margins of the growth forecast in trade is because rising inflation can lead to tightening of monetary and fiscal policies and slow down GDP growth across major markets and also because of the growing wave of economic nationalism that has curtailed globalization efforts in recent times. A factor that may push growth to the upside is the recovery in emerging market economies. But then a reason for worry is the substantially weakening of the linkages between global trade and global growth with the ratio even falling below 1:1 level for the first time since the turn of the century
The 1.3% growth in global trade volume in 2016 was because of the stagnating imports into developing even as that into developed countries touched 2%. Export growth of both segments remained stuck a little above one percent. Geographically most of the demand for imports rose from Europe and Asia. However, the growth in trade in dollar terms tells a different story. Numbers here show that global exports of goods fell by 3.3% in 2016 while global exports of services largely stagnated. But the future is brighter as global GDP growth at market exchange rates is expected to go up from 2.3% in 2016 to 2.7% in 2017 and 2.8% in 2018
Prospects of India’s trade recovery in 2017 is relatively better given that it has been able to withstand the global slump relatively far better than its peers. Numbers on the merchandize export show that India’s exports declined by 1.3% in 2016 to $264 billion. In comparison the exports of Asean countries declined by 1.7%, that of Asian countries by 3.7% and that of China by a still more substantial 7.7%. Other Bric countries also registered notable falls. While Brazil’s exports fell by 3.1% in 2016 that of Russia fell by a humungous 17.5%. However, though India retained its global share of 1.7% of merchandise exports in 2016, even while that of China shrunk from 13.8% to 13.25%, India’s global ranking in merchandize exports dipped from 19th position in 2015 to the 20th position in 2016 with UAE overtaking India
In the case of commercial services, India’s record is even more exemplary. India’s commercial services exports rose by 3.5% to $ 161 billion in 2016 even as the global exports rose by a measly 0.1% and that of Asia rose by 0.9%. China’s commercial services exports were badly hit in 2016 with the outflows declining by 4.3% to $207 billion. Across nations India’s exemplary performance in commercial service exports was surpassed only by a few developed economies like Japan and Ireland whose growth rates were a more buoyant 6.5% and 8.8% respectively. However, despite that India maintained its 8th rank among the top global exporters of commercial services
Given India’s relatively better export performance in 2016, it is very likely that the country would gain more substantially as global trade picks up in 2017 and 2018.
Source: The Times Of India
India is pegged to be the fastest growing economy in the world in 2017-18 and will be a key driver for global growth, according to the International Monetary Fund (IMF).
Retaining its growth forecast of 7.2 per cent for India for the fiscal year, the IMF, in its World Economic Outlook, also estimated that India would grow at 7.7 per cent in 2018-19 and said that 8 per cent growth in the medium-term is within reach. It pegged India’s growth rate at 6.8 per cent in 2016-17.
“Medium-term growth prospects are favourable, with growth forecast to rise to about 8 per cent due to the implementation of key reforms, loosening of supply-side bottlenecks, and appropriate fiscal and monetary policies,” said the report, which was released on Tuesday.
Concerned about the impact of demonetisation on the economy, the IMF had in January trimmed India’s GDP forecast by 0.4 percentage points from its earlier forecast of 7.6 per cent growth this fiscal. Moreover, praising India’s efforts at structural reforms that would drive domestic growth, the IMF has listed it as one of the factors that could help boost the global economy.
It has pegged world output at 3.5 per cent in 2017, rising marginally to 3.6 per cent in 2018. By 2022, it estimates global growth to rise to 3.8 per cent, led by developments in the emerging market and developing economies, where growth is projected to increase to 5 per cent by the end of the forecast period.
However, the IMF has also listed further reforms that India must undertake, including replacing the demonetised currency and reducing labour and product market rigidities, expanding the manufacturing base, and gainfully employing the abundant pool of labour.
Further, it said steps should also be taken to address NPAs and recapitalise public sector banks, reduce subsidies and for timely implementation of GST.
Source: Business Line
South Korean carmaker Kia Motors Corp will announce a plan for its first factory in India "soon", vice-chairman Lee Hyong-keun told reporters on Wednesday.
The comment, made on the sidelines of the Shanghai auto show, came after Kia and affiliate Hyundai Motor Co suffered a March sales slump in China, their biggest market, attributed to a political standoff and rising competition from local brands.
Kia said in a regulatory filing on Wednesday that the investment size for its India plant has not been decided.
India's Economic Times newspaper reported on Monday that the envisioned factory involves two phases with combined investment of $1.6 billion, in one of the biggest foreign direct investment projects in India.
Reuters reported in February that Kia was close to finalising Andhra Pradesh as the site for its first Indian factory, with production scheduled to start in 2019.