India, the third largest economy by 2025?
Manmomohan Singh is confident that India would be the third largest economy by 2025. According to him, India will be third largest economy by GDP in 2025. The words are from the celebrations of the Golden Jubilee of Indian Institute of Management.
India has to go by stoned paths to become the third largest economy. India can continue an average GDP growth of 9% in the coming years. India needs to face some more challenges. Inflation is the biggest threat. A group of bad news is coming from the global economy. Both European Union and USA are struggling. According to Pranab Mukkhejee, India’s fundamentals are strong. India is having higher interest rates. India can give relief to investors by reducing the interest rates, if necessary. We have bullets in our hand. But the condition is US is very pathetic. They cannot do anything more because their interest rates are very low. India will have big opportunities in future. Growing economies like India and China will be a safe destination of the entire world.
Morgan Stanley cut India’s GDP forecast to 7.2% from 7.7% to the FY 2012. According to them, the economy is slowing down. The global credit crisis in the 2008-09 affected India. It really blocked the capital inflow to India. The critical policies to reduce the fiscal deficit have been delaying. Petroleum price deregulation was a positive step to reduce our fiscal deficit. It empowered the Petroleum Companies to amend the petroleum prices, if necessary. Diesel Price Deregulation is the next hurdle for the economy.
We can see very big differences between Indian and Chinese economies. In Population. India will overtake China within years. Education plays a major role in the development of an economy. China is far ahead than India in terms of education. Chine keeps a literacy rate of 93% where India keeps only 65%.
India Growth Story started at 1991. Dr Manmohan Singh was the Finance minister. He brought much sophistication to the economy. He formulated a new development culture to the nation. Indian average annual growth was only about 3.5% in the first thirty years of independence. It increased to about 6% in the 90s by the advent of privatization policies. The growth rate was gone to above 8% after 2000. In 70s, 51.4% of the Indian population was lived under the poverty line. Now it is only about 22%. India is on the way to the second largest economy in the world. China will be a big hurdle for India to become the world’s largest economy.