Amid a weak global economic scenario, India continues to shine as one of the best performing economies by recording the fastest growth rate in five years. India’s Gross Domestic Product (GDP) expanded at a faster-than-expected 7.9 per cent in the March 2016. This beat the expectations, surprising economists as India grew at 7.6 per cent in 2016.
The growth rate is a cause of rejoicing for the Modi government which has just completed two years in office. Some of the analysts have said that the government’s focus on infrastructure spending is yielding results. The opposition has claimed that the growth rate had started picking up in 2013 itself when the economic recovery began.
One of the major factors that kick-started the GDP growth has been rising consumer spending. This has been fuelled by a series of rate cuts by the Reserve Bank of India (RBI). The RBI Governor Raghuram Rajan has cut the repo rate by 150 basis points since January 2015. The current repo rate is 6.50 per cent – the lowest level in more than five years.
Due to a stronger consumer spending, it has helped compensate for private investment, which remains sluggish. This is the major reason that investors want rate cuts to continue. However, some economists say that the latest GDP data and rising inflationary trend have reduced the chances of an interest rate cut next week when the RBI meets to finalise its monetary policy.
Author Profile
- India Writes Network (www.indiawrites.org) is an emerging think tank and a media-publishing company focused on international affairs & the India Story. Centre for Global India Insights is the research arm of India Writes Network. To subscribe to India and the World, write to editor@indiawrites.org. A venture of TGII Media Private Limited, a leading media, publishing and consultancy company, IWN has carved a niche for balanced and exhaustive reporting and analysis of international affairs. Eminent personalities, politicians, diplomats, authors, strategy gurus and news-makers have contributed to India Writes Network, as also “India and the World,” a magazine focused on global affairs.
Latest entries
In ConversationJuly 26, 2024India-Italy defence collaboration can extend to third countries: Anil Wadhwa- In ConversationJuly 23, 2024Italy views India as a key partner in Indo-Pacific: Vani Rao
- DiplomacyJune 29, 2024First BRICS unveils a roadmap for boosting tourism among emerging economies
- India and the WorldJune 11, 2024On Day 1, Jaishankar focuses on resolving standoff with China
