Chinese government newspaper Global Times believes that Demonetisation and GST reform was a game changer for India. It also appreciated Indian Prime Minister Narendra Modi. According to the report published in Global Times, India has become the world’s sixth biggest economy according to World Bank figures for 2017. For a country which is trying hard to establish itself on the world stage, the economic achievements India has made in the past couple of years are not that surprising.
India is often spoken of in the same breath as China, given their similar billion-plus populations and economic prospects. But whereas China has become the world’s second largest economy since 2011 and joined the ranks of the great powers, India is still widely seen as a nearly-power.
The status of being the world’s sixth largest economy is long overdue for India. After it broke away from British colonial rule in 1947, India did not end up a post-independence basket case. The three consecutive five-year plans (1951-65) drawn up and executed by the country’s first prime minister Jawaharlal Nehru went so well that Percival Griffiths, a former colonial administrator who was once skeptical of India’s capabilities, noted in 1957 that India was succeeding in doing what he himself had thought impossible. During that time, India’s industrial sector grew at 7.1 percent per year. British economist Barbara Ward remarked in 1961 that “the Indian record in both infrastructure and industry is one of substantial advance on a broad front.”
However, by relying on import substitution industrialization, India’s attempt to boost domestic production and be protectionist did not yield positive results for the economy. It led to the relative decline of India’s economic weight in Asia and the world.
But India has been trying to find a kind of pathway toward economic reform. It opened up its economy in the early 1990s and has seen steady growth. By most measures, it is one of the world’s fastest growing economies.
As some observers pointed out, two of the major structural reforms that the administration of Prime Minister Narendra Modi carried out in 2017, namely the demonetization of high-value notes and the introduction of a goods and services tax, laid foundations for more robust growth of India in the medium term.
Modi wants his country to become a leading power, though that status can only be acquired when the country’s economic foundations are truly solid. This means that the government needs to make economic development at home the priority.
India still faces a slew of challenges such as education, a weak spot. India also needs to put more emphasis on manufacturing to realize long-term economic growth. But it is clear about its economic agenda. The future of India is well expected, as the country heads toward the right direction.