Prime Minister Modi’s policies are doing magic and India’s economy is growing. The cherry on top is a global fall in crude oil prices. Now, private and public enterprises need to join hands to sustain the momentum of growth
The economics of Prime Minister Narendra Modi is doing some wonders and is paving the way for faster growth. India has emerged as one of the fastest growing economies in the world and also an important regional leader.
These positive developments are the result of contributions in the form of foreign direct investment made by Japan, Germany and the US. Added to this is the fall of global crude oil prices.
As this year comes to an end, there are reports that oil prices may drop to $20 a barrel next year. While this may reduce energy expenses, it has a flip side too.
Is India’s love for solar and alternative source for power the reason for a global fall in oil pricesIJ While looking for non-oil energy sources, India has to be on guard and not slow down.
That India is not faltering is evident from the commitment made by Japanese telecom giant Softbank that has announced plans to invest around $20 billion in solar energy power projects in India. The Softbank venture is aiming at generating least 20 gigawatts of energy.
Will this venture have a singular effect on global oil pricesIJ While experts do not deny the fact, the fall in oil price has been attributed to the shrinking of the Western role in fighting the Islamic State; largely headed Saddam Hussein who evaded sanctions and smuggled oil out of Iraq and Syria, in alliance with Turkey.
So, in case the Islamic State changes its tack from terrorism, it has the capacity to change the world’s economy and politics. Will 2016 see such a changeIJ Though this is something difficult to predict, but a significant move by India, a visit by the External Affairs Minister Sushma Swaraj to Pakistan may be the harbinger for this.
At the Heart of Asia meet, India made the beginning for a civilian coalition with Pakistan and Afghanistan. This significant move has the capability to alter the politics in the Middle East and the rise of the Taliban.
It seems a little far-fetched, but Ms Swaraj’s meet with Pakistan Prime Minister Nawaz Sharif and Afghan President Ashraf Ghani may usher in a new era of peace and prosperity in South Asia.
India, with the help of France, Japan and some large houses has the potential to become a global manufacturing hub for defence production. There are chances that the entire arms market scenario may changes in the coming years.
While the initiatives taken by Prime Minister Narendra Modi are potent, they have been criticised by some who believe that such efforts will become a captive of vendors. However, one has to keep in mind that India itself cannot invest such large amounts nor create the required basic infrastructure.
The Make in India initiative aims to boost the defence sector through public-private partnership and foreign direct investment. This initiative will not only create a fine balance between public and private enterprises, but will also ensure a fair competition a necessity for being a leader in the market.
Yes, a major concern for India is rupee depreciation. Even a fall in crude oil prices could not help the Indian rupee as China’s currency devaluation sent jitters across the global markets.
Economic advisors have not yet been able to find a formula to give the falling rupee a brief respite. This calls for positive positioning. The benefit of low oil prices could have been transferred to the consumers, growth rate could have been faster.
Due to the lack of policy formation on part of the Modi Government, India has its own share of problems. Given that agriculture is one of the largest contributors to the gross domestic product, not much has been done for the farmers in our country.
Agriculture is not one entity, it is varied and complex. It includes myriad crops, finance, marketing, chemicals, land, property, labour, transport etc.
Since agriculture is the backbone of the Indian economy, the need of hour is to come up with a new policy that can help the economy grow. Subsidise or not, it has the ability to create a stable price regime that can sustain the industry and people alike.
People are hopeful that Mr Modi will fulfil his ‘Vision 2050’ that aims to meet the challenges in agriculture and to bring second green revolution in the country.
Sadly, India’s private sector is not taking up the challenge that Mr Modi is keen on. It still seems to be ensconced in the socialistic mindset of the 1960s.
For Prime Minister Modi’s vision to be successful, both private and public enterprise should work together. If one does not invest and keeps sitting over the reserves, there is no chance of returns and benefits to the economy.