India has been a developing nation since the end of independence. Though we are still growing at a good pace, it has been staggering, pushing thousands of lives across poverty and crisis. Major factors in this weakening growth are the growing population, lack of proper technology, changing governmental policies, and diverse communities. Every country’s adequate development is measured through its GDP or Gross Domestic Product. The Gross Domestic Product, known by its initials GDP, is the monetary measurement of the value of total goods and services produced in a year. India’s GDP in 2021 stands at Rs.51.23 lakh crore, increasing by 31.7% since the last year.
India’s GDP has been devastated by the outbreak of the novel coronavirus since early 2020. The pandemic had confined people to their homes and left many jobless too. India had to divert its plan. It had to start preparing and investing in manufacturing medicines and other essentials to tackle the Covid waves, which hit the country twice. According to data by the Ministry of Statistics in India, the growth in the fourth fiscal year in 2020 started slowing down by 3.1%. The World Bank and the other rating agencies implied that India was seeing the slowest growth in the previous three decades since the economic policies of 1991. The World Bank also stated that the pandemic has struck India gravely and has “magnified the pre-existing risks to India’s economic outlook.” The research by the State Bank of India revealed that there was a contraction of 40% in the GDP. All this had made the country vulnerable and endangered it to see the worst recession since its independence. This happened when leading companies of India started to suspend employees’ security, startups failed to generate enough fundings, and transporting goods began to reduce too.
India faced a challenge yet again when it had to go through complete lockdowns, not just once by twice. The lockdown again impacted economic growth as several layouts failed to generate a decent income. During this lockdown period, an estimation of 140 million people had lost their jobs or had salaries cut off. As the period of isolation began for India, the country lost $2.8 trillion of economic movements and remained in no function. It took months for the nation to recover from the loss. The Government of India introduced several extra funds and packages to tackle the pandemic situation in the country. The expenses on defense equipment were minimized, and the Cabinet passed several economical packages, including the free grain packages. However, it is still not enough to accommodate the loss of each life in India. The country is seeing growth, but it is still miles behind. The government is still working hard to bring in the recovery after being covid stricken for two years.
It might surprise some, but India’s GDP growth was already in a declining stage, even before the pandemic had approached. The Covid did take away two years of progress from India, but it was already struggling to witness proper growth. The GDP of India was already decreasing for eight quarters, that is before the Covid situation. According to the statistics and data published by The Hindu, there was a dip of 5.1% in the GDP from March 2018 to March 2020, during just one week of the lockdown. The GDP growth was observable from 2011 to 2012. However, since 2017, the economic growth of the country has only declined. It started to decelerate from 7.1% in 2016-2017 to 6.5% in 2017-2018, as per the reports by Central Statistics Office. The economic activities faced two huge blows with the government’s application of demonetization and the goods and services tax (GST). The market prices marked a growth of 9.5% slower than the assumed growth of 11.75% of the 2017-18 budget. The public expenditure, which grew to 9.4%, was slower than the 11.3% in the previous years. These declinings had already given rise to the issue of poverty, unemployment, food shortage, and lack of other essential facilities. The Covid situation was just fuel to burst out these issues.
Despite India on the brink of a staggering GDP, it has evolved its future economic plans to facilitate growth and reduce the current depleting scenario of the country. The next ten years are crucial for India to compensate for what has happened to its economic structure. According to the estimates of the International Monetary Fund, it will take India three years to heal from the economic setback created by the Coronavirus. Additionally, the same monetary fund stated that the per capita GDP will see stable growth by the end of 2022. As per the Union Budget for 2021-22, capital expenditure is set to increase by 34.5%. The increment in government expenditures aims to attract private investments. This will, in turn, be linked to product incentive schemes and generate excellent opportunities. As of 2021, the Union Government has directed Rs 2,250 crores for the horticulture development and acceleration until 2022. India is also initiating steady economic relations with foreign companies. With the advent of Make in India and Digital India, many foreign companies are settling in India and finding favorable opportunities. These investments and development plans are bringing hope for India to increase its GDP.
As per the reports by the Reserve Bank of India, if India continues on this path, it will see overall GDP growth of 9.5% in FY22. This includes an increase of 18.5% in the first quarter of FY22, an increase of 7.9% in the second quarter of FY22, 7.2% in the third quarter of FY22, and 6.6% in the fourth quarter of FY22. Along with this, India is also aiming at its renewable resources for producing energy. By 2030, it aims to achieve 40% of its energy from non-fossil resources. It also seeks to uplift the capacity of its renewable resources by 175 gigawatts in 2022. In addition to this, India has also taken part in the Roadmap 2030 to combat climate change 2030. With these plans on hand to execute, it is estimated that India will become the third-largest consumer economy. This is because its consumption will jump to $4 trillion by 2025. As per the reports by PricewaterhouseCoopers, India can go ahead of the USA and become the second-largest economy in terms of purchasing power parity (PPP) by the end of 2040.
As per the India Economic Strategy website statistics, India will have the world’s one-fifth working population by 2025, which will benefit the nation in bringing in incomes. Also, by 2035, the five largest cities of India will initiate an economy of which will be the size of middle-income countries of the world. India is currently working ahead for 2021-22 to grow its GDP to Rs 146 trillion. It also sees a growth of 8.3% in the GDP in late 2021. What still looms on India as a threat is a possible outbreak of the third wave in the near future. If it happens again, the nation has to push its financial fundings to produce vaccines, masks, and other essential technology needed to combat the virus. The government has also been blamed for inadequate fundings to the required states.
However, the country is still optimistic about increasing its GDP. As per the data provided by CBRE, India’s demographic factors and a sharp rise in the working population will help the nation achieve the projected growth. By the year 2030, it is believed that urban areas of India will account for 75% of the GDP in India and will act as the economic engines of the nation. The advent of technology is also changing the course of living and lifestyles in India. It is estimated that by 2025, the digital economy in India will grow and account for 18 to 23 percent of the GDP. The expansion of the workforce will make India a hotspot for investments for real estate sectors too. Though India is seeing and hoping for a bright future, it is still tackling several challenges in addition to the pandemic. The government is constantly releasing initiatives for employment and education too. Only when the nation is educated, it shall prosper. Initiatives like Atmanirbhar Abhyaans saw the government investing approximately 100,000 crores to generate employment, boost small and medium enterprises, initiate more consumer durability, manufacture items of domestic defense, and green energy. India also changed its Foreign Direct Investment policies in 2020 to safeguard Indian companies from opportunistic takeovers due to the pandemic.
India is hopeful and is striving hard to bring back its GDP on track. It also boosts the spirits of entrepreneurs and entrepreneurship, which is viewed as the gold coins of development. It is also continuously racking through startups and ventures and supporting them through the Ministry of Micro, Small, and Medium Enterprises initiatives. The country dreams to strive hard to be a developed country and change its course too. It is how Prime Minister Narendra Modi quotes,” If we decide, we can change the pitiable condition of the Indian economy. We have to take up the responsibility and show commitment.”