Indian Finance Minister Predicts Positive Annual Growth

According to finance minister Arun Jaitley, India’s economy may grow as much as 9.0 percent annually, but only under the right economic conditions, according to CNN Money. The South Asian country achieved significant growth in 2015, but it was held back due to such factors as a decline in the steel industry and a heavy monsoon season. India remains the fastest growing major market in the world, outgrowing China.

According to finance minister Arun Jaitley, India’s economy may grow as much as 9.0 percent annually, but only under the right economic conditions, according to CNN Money. The South Asian country achieved significant growth in 2015, but it was held back due to such factors as a decline in the steel industry and a heavy monsoon season. India remains the fastest growing major market in the world, outgrowing China.

Jaitley may exhibit optimism about the economy, but he is not fully satisfied with a 9.0 percent projection. This is a tall order, given the fact that most governments around the world would do just about anything to attain such a forecast, but India is held to a higher standard as it becomes the primary emerging market in the world.

India will face an even greater responsibility as it surpasses other emerging markets such as Russia and Brazil, two nations undergoing economic turmoil. In addition, as China contends with its own financial distress, the world increasingly relies on India to serve as the next trendsetter in emerging markets, and the nation has a natural advantage in certain respects. For example, authorities benefit from the gradual dip in oil prices, which is surprising at a time when many energy-driven economies suffer immensely.

Because India imports a great deal of oil, the lower-priced atmosphere helps consumers and the business community, and it allows the government to reduce the amount of fuel subsidies in order to focus on vital infrastructure projects.

India also fared well against a stronger dollar in 2015, which is a testament to the nation’s strength as many other emerging markets struggled against the dollar. India’s own currency, the rupee, gained value last year while other major currencies lost significant value.

Moreover, foreign investors have become more interested in the economy, not only because of new leadership but also due to India’s surging young population. Analysts also say that India’s growth potential hasn’t peaked yet, yielding more time for potential investors who may wish to pour money into the country.

With that, India’s rising status may grind to a halt as several unknown factors could hinder growth. Even though India shows convincing data going forward, the economy may still recede because of a turbulent world economy, and few could have foreseen the drastic downfall of the Chinese economy in such a short time.

However, Prime Minister Narendra Modi gained a great deal of confidence from investors through his pro-business reforms, including central bank chief Raghuram Rajan, who has been crucial in lowering the nation’s foreign debt. The real challenges will be addressing regulations to attract more business, while training a new population of workers to sustain future growth, and officials must encourage stat-ups and other companies that could expand the economy.