Despite economic growth slowing from 8% to 6.9%, there are mixed signals in the Indian economy. Corporate investment has increased, but the 72% decline in foreign investment and high interest rates are worrying. Consumption is stable, but new markets are being found for exports.
Even though India is the fastest growing economy in the world, the new figures are also showing some concerns. The economic growth of 8% in the first half of last year has declined to 6.9% between October and March. Its effect can be seen on tax collection and government expenses. Apart from GDP data, below are five important aspects that help in measuring the real strength of the Indian economy…
1. Common man’s shopping
How often you go to the shop to buy biscuits or shampoo is a big indicator of consumption in the country. For the first time since Covid, the number of purchases by Indians has remained stable (157 times in a year). But after the cut in GST, a slight increase has been seen in the sales of everyday items like soap, shampoo. More than the profits of big companies, these purchasing figures reveal the condition of the common man’s pockets.
2. Are companies ready to invest money?
The industrial sector of the country is showing growth. While last year new investment schemes worth Rs 23.9 lakh crore were announced, this time it has increased to Rs 26.6 lakh crore. Maximum investment is coming in sectors like electricity, chemicals, IT and transport. Andhra Pradesh, Odisha, Maharashtra and Telangana are the favorite destinations for investors.
3. Cost of borrowing
Despite the reduction in bank interest rates, the interest on government bonds remains high. It is a matter of concern. The reason for this is the large scale borrowing by the government and the states. This makes it expensive for industries and the government to raise money. This high interest rate may affect new investments.
4. New foreign markets
America’s import tariffs and European Union’s environmental taxes are becoming challenges for Indian exports. Still, India is exploring new paths. Fuel exports to Spain and growing exports of marine products to Vietnam, Russia and China are good signs. New trade agreements with countries like Britain and Oman coming into force this year will further strengthen the export sector.
5. Interest of foreign investors
Investment of long-term investors from all over the world in India has decreased last year. There has been a 72% decline in such investments in India. The reason for this is that most of the investors’ money is going towards America. This money is vital for the country’s infrastructure development, so it will be important to see whether investment returns in the coming months.
In short, it is not just the GDP figures but the purchasing power of the people, investment interest of companies and diversification of exports that will decide India’s economic future in the coming years.