Almost every nation covets a higher spot on the World Bank’s ease of doing business list. Higher ratings represent the capacity to attract and maintain foreign investors and the resulting economic boost they bring with them. This year, India has done the nearly unthinkable, jumping 12 spots up the rankings from 189 to 130.
Every nation deserves a visionary leader, from whom its citizens can expect real results. India has had its share of visionary leaders. Mahatma Gandhi and Jawaharlal Nehru, to name two, held views on the economy that were not only diametrically opposite but also influential in shaping the trajectory of Indian political and economic independence.
India has pulled ahead of China and United States as the most favoured destination for foreign direct investment (FDI). According to the Financial Times (FT), India received US$31 billion in FDI in 2015, which is US$3 and US$4 billion more than China and the United States respectively. Moving from fifth place in 2014 to first certainly reiterates that India is a bright spot in the world economy today.
Hyperinflation during the 1970s and 1980s relegated fiscal policy as the macroeconomic policy of last resort, ushering in the golden age of monetary policy. With Paul Volcker’s spectacular use of monetary policy to tame hyperinflation, which saw policy interest rates breach 20 percent and the Volcker recession, ‘independent’ central bankers came to be seen as the masters of macroeconomic policy.
The decision of the Reserve Bank of India (RBI) to slash the repo rate (the rate at which the RBI lends to commercial banks) by 50 basis points (bps) has surprised many. The RBI governor, Raghuram Rajan, had previously taken baby steps to reduce interest rates, focusing strictly on inflation. Now the repo is at 6.75 percent, the level of 2011, down from 8 percent at the start of 2015. Both the domestic and external economic environment warranted big steps by the RBI to induce economic growth.
The cliché “Abandon all hope, ye who enter here” from Dante’s Inferno appears more appropriate to the current housing situation in India than anywhere else. India is facing a daunting housing shortage of 49 million units (Tiwari and Parikh 2012).
The UN declared 2015 the year for global action on development. The post-2015 agenda aims to fill the gaps in the Millennium Development Goals (MDGs) and is far more ambitious than ever before. The year could prove crucial for integrating gender equality and women’s empowerment into the global development and climate agenda. However, will these global processes reach their intended goals? In addition, what do they entail for gender justice in developing countries like India?
Of the many slogans coined by Prime Minister Narendra Modi’s government, ‘Make in India’ is the most important. It promises to make India an important investment destination. However, like most other slogans, it is important be clear about what has to be achieved — and how — before assessing whether or not the flowery words may come true.
India, the world’s third largest economy measured in purchasing-power parity terms, became a middle-income country in 2007. It has one of the world’s youngest populations, with some 260 million people below the age of 25, and its economy is once again growing fast, at 7 percent growth one of the world’s fastest-growing economies as of August 2015. However, will it grow rich before it grows old?
Indian growth stood at 7.0 percent year-on-year in the first financial quarter of 2016, a drawback from the 7.5-percent growth seen from the previous cycle, notes AFP. Prime Minister Narendra Modi’s rightist cabinet is responsible for numerous reforms, but outside pressure grows for his administration to do more. Modi aims to take India into double-digit growth territory, and officials expect an 8.1-percent surplus for the year, but experts believe such an assessment may be overly optimistic.
