Future Economic direction of any country is uncertain. Back in 2013 and before the beginning of 2014,some prominent economists and research firms predicted that emerging markets such as china, India will face hurdles, might fall in the asylum of financial crisis due to external shocks and Internal shocks such as FED Tapering, Growth in developed markets, Higher Inflation, Corruption, Unemployment etc. But 2014 painted a different picture exactly opposite to their predictions! And now economists are once again making predictions for 2015 but now they are heavily optimistic on India and china due to various factors such as change in government, Growth oriented policy measures, and they hope it will set these countries in straight path.
Keeping this so called economist wisdom aside, I tried to understand how Indian economy might perform in 2015 by analyzing some statistics and macro trends, wittering around graphs and pictures these are my conclusions for 2015 based on common sense and logic.
1.Economy will grow but not so optimistic as everyone expects
Recent trends and stats are providing some misguided picture about future economic growth based on current scenarios but what might come in 2015 gives a different picture. Logically speaking India’s economic growth this year is driven by internal consumption and animal spirit, rather than external demand, much of the growth factors came with Mr.Modi premium. So looking from that point-2015 will be a year of external shocks starting from geopolitics, European debt crisis and issues etc. Our economy might still continue to grow from internal self sufficiency. But some economists including RBI governor Mr.Rajan are making projections based on recent economic reports and excluding the possibility of external shocks
2. Our biggest hurdle is China,that’s why Mr.Modi’s trade policies will not promote exports neither helps in manufacturing
From Geopolitics to economic competition, China is always better than India. Chinese government is so much pragmatic compared to India’s counterpart and China’s model, on the basis of export and foreign investment led growth. Chinese are exporting around 2/3 of the world goods and significantly competitive even with US standards. Now Our government is trying to mimic this strategy, but Indian manufacturers and exporters cannot compete with Chinese counterpart. India is a Fabian mixed economy with some free market but our export sector is not state oriented as with Chinese neither our regulations are competitive as them. If we aim to create employment through manufacturing and exports it might work only to some extent. Chinese will never allow another country such as India to take over their competitive trademark in Exports and Manufacturing sectors.
3.Employment, Inflation and GDP will be stable
We may have a good economic year, if present scenario continues and immune to external shocks which might leave us with better 2015. Inflation is so uncertain due to 2 things. 1) Fall in global oil prices which may rebound 2) Higher Interest rates which might be decreased
4.Mr.Modi’s Cabinet and policies: A glitter is not gold
Narendra Modi is dynamic, talented and forward looking leader. His policies are much better than congress. But also some problem, all economic policies won’t work-some may give astounding results. I can’t list out all the policies of Mr.Modi, he carried out a lot of innovative measures, it is quite unclear from economic terms what the results will be. But as majority of the economic participants are optimistic about their future it may yield a good result. There is also a lot of policies which might create a different effect. Not all ministers in the cabinet is as innovative as Mr.Modi which is an actual drawback
So this is my short outlook for next year in terms of economic expectation, Of course some might be wrong, I can’t predict the future like a crystal ball!. These analyses are based on the present trend and some logic
I would like to end this article by wishing the Readers:
A happy new year – let this year bring prosperity to your life