India’s relation with its rich and vibrant festivals have long been recognised globally for bringing people closer and creating a strong bond of humanity. These festivals are not only the testimony of diverse traditions and cultures, but it also moves the economy exponentially.
As the festival of light ‘Diwali’ is here, the Indian economy is showing green spots of steady growth in various sectors. The businesses on the back of strong domestic demand are reviving as India meets its much awaitedfestive season.
Splurging with the festive season, country’s online marketplaces witnessed sales jump of 27% from a year ago to $5.7 billion during the festival season’s first sale between Sept. 22-30. Another important sector, automobile sales also saw an upward trend as new vehicle sales jumped 57% from a year ago during the nine-day ‘Navratri’ period that precedes Diwali, data from the Federation of Automobile Dealers Associations mentioned. Further, sales of two-wheelers in India, an indication of rural demand, grew 3.7% from 2019 levels. Cars and sports utility vehicle sales jumped 92% in September from a year earlier, according to the Society of Indian Automobile Manufacturers.
The return of shoppers will serve as a boost to consumption, the backbone of the economy. As demand for goods rose, businesses ramped up capacity. It is important to note that the total flow of financial resources from banks and non-banks to the commercial sector soared nearly five-fold to 9.3 trillion rupees between the April-September period, from 1.7 trillion rupees a year ago, according to the Reserve Bank of India.
India: A Bright Spot
While nations around the globe grapple with the volatile slowdown in terms of economic growth, India has not remained unimpacted, but is doing better and is in a relatively bright spot compared to other countries, a top official of the International Monetary Fund (IMF) recently mentioned.
The statement by IMF Director of the Asia and Pacific Department, Krishna Srinivasan referred to India’s sustained economic momentum after the onset of the Covid-19 pandemic. The silver lining in the Indian economic front has come at a time when there is a slowing across many parts of the world even on the back of inflation.
The IMF in its latest ‘World Economic Outlook’ report issued a gloomy forecast for global growth, downgrading its forecast for 2023, which is likely to be much lower than expected, due to several main factors. While the IMF has projected India’s growth rate of 6.8 percent in 2022 as compared to 8.7 percent in 2021, the projection for 2023 is set at 6.1 percent, which is higher than major economies.
More than a third of the global economy will contract in 2023, while the largest economies like the United States(1%), European Area (0.6), and China (4.4) will continue to stall, the IMF data mentioned.
The 5th Largest Economy
With annual Gross domestic product (GDP) of $3.2 trillion, India is presently pegged as the 5th largest economy, with the IMF predicting a strong GDP growth rate in 2022.
On September 2, IMF announced that India had surged past the United Kingdom to become the fifth largest economy in the world. The latest change in rankings is based on quarterly gross domestic product (GDP) numbers in current dollars for the period ending December 2021. India increased its lead over the UK in the quarter ending March, IMF data showed.
Notably, India became the fifth largest economy from 11th within the span of a decade. The world’s largest democracy overtook the UK and is now behind only the US, China, Japan, and Germany, according to IMF projections.
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