AFA RAJYA SABHA TV- 26/01/2019
India’s impact on world economy
[MAINS OPTIONAL- ECONOMICS]
As per the German Chancellor Angela Merkel, Indian and Chinese economy are effecting world economy and it should be taken into account for having a relook at the global trade and financial systems. Here is the major impacts of India on world economy and its sustainability for decades ahead.
- Indian trade is not near to the Chinese trade. Indian exports is $305 billion and import is $465 billion. This is the small portion of the world trade. But there is major impact of China and USA on world trade.
Growth: By looking forward for 10 to 15 years ahead from now, India is the fastest growing economy. India continues to have positive deviation from present in flow of trade and flow of finance because India requires money for the expansions -building, Infrastructure, manufacturing base and other services.
- In PPP( Purchase Power Parity) term, India is the 3rd largest economy after USA and china.
- In 2016 India was 7th largest economy, in 2017 India was 6th largest economy and it is likely to be increase further to 5th place for the year 2018 (not released yet) in the world on basis of GDP (Gross Domestic Products) after USA, Germany, Japan and China.
- Incremental GDP after global financial crisis in 2008 of India was 15% where of China was 33% and USA was 10%. European Union and japan stands low at 1% and 2% respectively.
- Considering the world GDP growth, India is 2nd most important economy in the world.
Fields India needs to focus:
- Education: Basic education, secondary education and University education are the primary areas to be concentrated. Numerous survey shows many are unemployed even though they acquire University education. The valued education related for the development of society is required at university level.
- Health Care: India is needed to be taken care of its population. Sanitation also becomes the part of health care and is improving with new initiatives form Government like “Swatch Bharath”. It is also required to take care of this further for the health and wealth of the nation.
- Infrastructure: Manufacturing units are needed to be established in order to have healthy economy. Although the work is being done over this, but for the sustenance of Indian economy, should focus largely on providing employment, by setting up new manufacturing bases.
Challenges: Two factors are influencing for the challenges on Indian economy.
- Internal pressures to do necessary things.
- External environment which is ceasing to do so.
India needs to move forward faster pace in order to achieve sustainability of economy.
- India has surplus capacity in terms of human resources, but has failed to push them towards employment at least to the maximum potential.
- Sluggishness in choosing a direction from students and youths to the second order for economic growth like accounting etc.
Conclusion: The statement from German Chancellor Angela Merkel might be over the move of USA towards Unilateralism. This is threatening the world economy by the moves of USA and trade relationship between USA and China. Coming to Indian economy, it is sustainable for next decade or 15 years. Since the population of the nation is largest in the world, the demand for consumption increases and it is recorded that, growth in per-capita income has been increased. It is also required that, skilling and education fields towards economic aspects to be concentrated.
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