2016- An Invigorating Dawn in the Indian Economy!

No wonder, that the unsteady financial outlook of India has been a gospel truth in this 21st Century. In this writing piece, I am exploring the financial year- 2016 regarding the outcomes it is likely to bring for us.  We know that economic deterioration is not an everlasting thing but, the continuous series of critical financial downturns has indeed terrified us with longer and constant losses. A weird crisis is increasing at an enormous pace as global economies have complex interrelations. The hazard has become viral and thus affecting many countries around the globe.

In this realm of chaos, India has surprisingly remained quite resilient. One aspect that may ease the tension is national consumption that alleviates the spoiling economy. Let me highlight few benchmarks achieved by Indian economy. In 2012, Indian GDP was at $4.825 billion which made our country the 3rd largest economy in the context of PPP (Confederation of Indian Industry). As witnessed in the last decade and a half, India continues to be a one of the fastest growing economies. Agricultural endowment to GDP has fallen from 32% in 1992 to just 14% in 2012. Isn’t it fascinating? The rapid industrialization and development of service industry are prominent in India. The young generation has positively influenced the Indian economy. The percentage of people working at the age of 65 is least in India. India continues to be a transforming economy with industrial zones like Oil & Gas, Auto, and BFSI, Telecom, which contributes many profits in domestic business as well as exports. For the first time, India has excelled the World Bank’s growth outlook for 2015-16 with 7.3% GDP in 2014-15 and expected to grow 7.5-8.3% in 2015-16. One thing we must accept that despite severe economic stagnations, the Indian economy has survived to be one among the fastest growing economies. Rapidly developing the middle-class section of the society, which is quite large in percentage, is a significant factor that contributes in boosting domestic consumption.

We cannot afford to neglect inflation while discussing the economic prospects of India. It has been consistently fluctuating in between 5.37% to 5.60% since 2015 till date in case of essential things; hiked costs of agricultural products, rigidity in crude oil prices and high fuel prices being the reasons behind. Very often, you’ll find an expanding economy facing this issue. However, mighty economies are capable enough to beat such problems. The wages and costs are stimulated since everybody strives for labors and raw material. Generally speaking, the corporate sector has witnessed serious downfall in the recent years in India. Ascending input prices and interest rates are the culprits here.

Because of consistent uncertainties in the Europe and the US, we are likely to see the slower down of external operations and financial activities. Industries like crude oil, Steel and Iron, Insurance, silver mining too are facing difficulties. However, with the emergence of 2016, USA is likely to be sustained as a superpower. After a great recession of 2007-08, over the years, USA has effectively prospered its financial growth. FY 2015 proved to be a healthy economic period for the USA that has helped to discard the life support of near-zero interest rates. This year, its GDP growth rate is supposed to remain within the 2-3% perfect range. With lowered costs of food, transportation, and raw materials, profit margins are expected to increase. Employment rate seems to be satisfactory with 4.7%. USA’s power in consumer expenditures has encouraged various businesses to make investments in plant upgrades, software, and equipment. It will not be a myth to call the USA as the bedrock of the global economic structure. Over 80% of commercial transactions around the world are conducted in dollars as 87% of overseas currency market operations. On the other hand, IMF predicts a slowdown in China’s growth by 6.3% in 2016. World’s demand for Chinese goods is not increasing as it used to be earlier. China’s Central Bank has forecasted a lower GDP with 6.8% in 2016. Affected financial development of China has boosted dollar discharge from the emerging markets across the globe.

In India, taxation mergers took place through steps like a hike in diesel rates, deduction in the subsidiary of LPG, consent for disinvestment of 4 public sector PSUs, and so on. You can figure out FDI and land reforms as the only positive aspects. Looping fiscal deficit or attracting FDI cannot be sufficient remedies to revitalize the Indian economy. We require some fresh ideas and creative concepts to accelerate the growth. We are one of the best destinations for outsourcing the MNCs and international corporate firms, we should make the best use of our strengths to develop and capture openings. Another requirement is to expand our exports by attracting few emerging economies in developing countries on the African continent and middle- east.

Still, my perspective notices few evident changes in the Indian economy in this year. For sure, with the beginning of this year, the rate of business globalization has amplified like never before. Numerous indicators offer profitable opportunities for expanding markets, growing customers and client base. Economists and business experts predict that 2016 is going to be the crucial year regarding increased job opportunities for Indian population. The workforce is likely to get elevated as an after-effect of the seventh pay commission which will fuel greater salaries for government workers. As the government is welcoming the private sector investments in liberalized strategies, the ripple effect in many industries is expected. India will also exceed the emerging markets to watch 10% return in the year ahead. Nation’s robust economy will be eager to welcome new sales & marketing initiatives from overseas. To conclude the matter, in the global arena, the conditions might be tricky and tough, but not impossible to overcome. The rightmost remedy will be to be persistent and to implement concrete strategies to grab new openings.

About the author

Ganesh Iyer is a graduate in Chemical Engineering from Bombay University. He brings with him over 14 years of experience in the IT industry working for companies like Tata Infotech, Infosys and Bearing Point in the US. Ganesh is a Certified Project Management Professional (PMP), Six Sigma Black Belt from American Society for Quality, and a certified Lead Auditor for Information Security Management System (ISMS). He has led a number of Change Management initiatives for clients across Asia Pacific and has trained more than 500 Lean Six Sigma Belts worldwide and coached over 300 breakthrough improvement projects. He is a certified assessor for Business Excellence conforming to EFQM model and a Certified Internal Auditor for TS 16949:2002 standard.View LinkedIn Profile

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