Solve for India
The Rise of the Golden Bird: India’s Commercial Intelligence and Statistics Post-Pandemic
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Prime Minister Narendra Modi held a meeting on April 30 to develop a strategy to attract FDI, particularly foreign firms wanting to move out of Chine, to boost investment. The Indian government is reportedly in the process of identifying and developing 4.6 lakh hectares of land, including 1.1 lakh hectares of existing land in industrial areas, and planning fiscal incentives in the form of preferential tax rates, tax holidays etc to attract foreign firms. Further, a few state governments are also proactively working to capitalise on the opportunity.
Do you know?
By the time of independence, India was battered, bruised and left wounded. Ancient India was called a Golden Bird because it was wealthy, prosperous and had established Socio-economic systems.
Mark Twain summarises why India is called a “Golden Bird”. He quotes: The land of dreams and romance, of fabulous wealth and fabulous poverty, of splendour and rags, of palaces and hovels, of famine and pestilence, of genii and giants and Aladdin lamps, of tigers and elephants, the cobra and the jungle, the country of hundred nations and a hundred tongues, of a thousand religions and two million gods, cradle of the human race, birthplace of human speech, mother of history, grandmother of legend, great-grandmother of traditions, whose yesterday’s bear date with the modering antiquities for the rest of nations-the one sole country under the sun that is endowed with an imperishable interest for alien prince and alien peasant, for lettered and ignorant, wise and fool, rich and poor, bond and free, the one land that all men desire to see, and having seen once, by even a glimpse, would not give that glimpse for the shows of all the rest of the world combined.
And the story begins…
As time goes the nation has faced several meltdowns since it’s independence in the growth of the economy. But Since Narendra Modi came to power in 2014 he has actively pursued India’s international relations.
While it is debatable how much his foreign policy activism has delivered in concrete terms, it has undoubtedly brought greater vigour and enthusiasm into India’s foreign policy.
Eventually, India also has it’s own advantage among other countries, like Demographics Dividend, Import-Export growth traction(both Product & Services), Military and Defence spending, Elevating the implementation of the Startup ecosystem by imparting of Make in India initiative, Reform for Ease of Doing Business and Building infrastructure on the next-gen powerhouse using technologies like A.I, Quantum Computing, NLP, Machine learning, Deep Tech etc.
Sorry, In this article we will not look in the political aspects of the nation rather see the building blocks of based upon the contribution of the various sectors in the economy.
How Importing and Exporting Impacts the Economy
A country’s importing and exporting activity can influence its GDP, its exchange rate, and its level of inflation and interest rates.
A rising level of imports and a growing trade deficit can have a negative effect on a country’s exchange rate.
A weaker domestic currency stimulates exports and makes imports more expensive; conversely, a strong domestic currency hampers exports and makes imports cheaper.
Higher inflation can also impact exports by having a direct impact on input costs such as materials and labor.
Effect on Gross Domestic Product
Gross domestic product (GDP) is a broad measurement of a nation’s overall economic activity. Imports and exports are important components of the expenditures methods of calculating GDP. The formula for GDP is as follows:
In this equation, exports minus imports (X — M) equals net exports. When exports exceed imports, the net exports figure is positive. This indicates that a country has a trade surplus. When exports are less than imports, the net exports figure is negative. This indicates that the nation has a trade deficit.
Here, is the look of our nations import-export data:
In the backdrop of the COVID-19 crisis, while global investments depict a decline in Foreign Direct Investment (FDI) inflows, Indian prospects are bright owing to its sustained long-term growth trend. According to the United Nations Conference on Trade and Development (UNCTAD), India’s large market and positive economic growth in the post-pandemic period will draw investments to the country.
India was the 9th largest recipient of FDI in 2019 according to World Investment Report 2020 by UNCTAD.
India is also the biggest FDI host in South Asia and contributed largely to the overall FDI growth of 10% recorded in the region.
The report also stated that professional services and digital economy, which are among the most sought-after industries in India, may show a speedy rebound owing to the interest shown by venture capital firms and technology companies in India’s market through acquisitions.
SECTORAL PERFORMANCE
As of March 2020, the following sectors have attracted the highest cumulative FDI inflows since April 2000:
Service Sector Industry, which is the single largest contributor to India’s GDP, is also the top performer in terms of percentage of Equity Inflows.
EASE OF DOING BUSINESS
The Ease of Doing Business (EoDB) index is a ranking system established by the World Bank Group. In the EODB index, ‘higher rankings’ (a lower numerical value) indicate better, usually simpler, regulations for businesses and stronger protections of property rights.
The research presents data for 190 economies and aggregates information from 10 areas of business regulation:
- Starting a Business
- Dealing with Construction Permits
- Getting Electricity
- Registering Property
- Getting Credit
- Protecting Minority Investors
- Paying Taxes
- Trading across Borders
- Enforcing Contracts
- Resolving Insolvency
Rankings and weights on each of the mentioned parameters are used to develop an overall EoDB ranking. A high EoDB ranking means the regulatory environment is more conducive for starting and operating businesses.
INDIA — EASE OF DOING BUSINESS RANKING
Among the chosen 190 countries, India ranked 63rd in Doing Business 2020: World Bank Report. In 2014, the Government of India launched an ambitious program of regulatory reforms aimed at making it easier to do business in India. The program represents a great deal of effort to create a more business-friendly environment. The efforts have yielded substantial results with India jumping 79 places in the Doing Business rankings since 2014.
Positive changes have led to this impressive improvement in India’s ranking in the EoDB index. India’s major achievement is summarised here:
Independence Day 2020: It is nation first for Indian Army
India announced on 9th Aug 2020 that it will ban the import of 101 types of weapons and ammunition over the next five years — from artillery guns to light military transport aircraft and conventional submarines to long-range land-attack cruise missiles — in a significant step on the long road towards achieving self-reliance in the defence sector.
The detailed list of equipment published by the defence ministry has spelled out that the import embargo will kick in between December 2020 and December 2025 for different categories of military hardware.
The government has also created a separate budget for the purchase of locally produced military hardware.
“Our aim is to appraise the Indian defence industry about the anticipated requirements of the armed forces so that they are better prepared to realise the goal of indigenisation,” said defence minister Rajnath Singh, who made the announcement on Twitter.
And the Superstar of the evening….
The Dynamics of Self-Realient India
At a time when the world is suffering from a deadly pandemic, India plans to convert this crisis into an opportunity and strengthen its fight by becoming Aatmanirbhar or self-reliant.
For more details for Self-Reliant India plan visit: https://www.ibef.org/blogs/self-reliant-india-movement-an-opportunity
Prime Minister Narendra Modi, addressing the nation on its 74th Independence Day today, said an “Aatmanirbhar Bharat” or self-reliant India had become a mantra for 130 crore Indians and it would soon become reality.” Aatmanirbhar Bharat is in the minds and hearts of every Indian. We are transforming this dream into reality,” PM Modi said in his seventh address from the historic Red Fort, a speech dedicated mainly to his emphasis on a self-reliant economy.
“In the midst of the Corona pandemic, 130 crore Indians have pledged to build an Aatmanirbhar Bharat. I am confident that India will realize this dream. I am confident of the abilities, confidence and potential of my fellow Indians. Once we decide to do something, we do not rest tilll we achieve that goal…”
India must grow for the world to grow, he said. “As we move towards our 75th year of Independence, the entire nation must take a pledge to make ‘vocal for local’ the mantra of the nation.”
Making a strong case for his “Make in India” vision, the PM said: “How long will we export raw materials and import finished goods? Time has come that we end this cycle. India must now manufacture everything it consumes… and not just that — export to the world too as we grow.”
PM Modi reiterated his plan to make India a global manufacturing hub, noting that even during the coronavirus pandemic, global businesses were investing in India like never before.
“FDI (Foreign Direct Investment) has broken all records. There has been an 18% growth in FDI. Even in the middle of the coronavirus pandemic, investments are pouring into India. It tells us that the world sees our potential and has hope from a rising India” he said.
This had become possible, he said, because India had worked on its policies, on infrastructure and on strengthening the foundation of its democracy. “Many businesses across India are looking at India as a centre for their supply chains. From Make in India, we must go toward Make for World,” he said.
The Prime Minister stressed on the need to boost self-reliance in farmers and agriculture for a stronger economy at the grassroots.
“Our mission for Vocal for Local, re-skill and upskill will help build an economy of self-reliance among those below the poverty line,” he said.
Views:
Of course, the stakes of India becoming superpower are high. The nation has the most competitive youth population backed by world largest demographics dividend. Having said that in this turbulence India will rise and shine. Nation sooner or later will able to see the endless opportunities across various sectors and utilise the Make in India advantage.
Indian Government forges to change the mindset of the nation emphasizing “vocal for local’ for the self-reliant nation. There may be lakhs of challenges for self-reliant India, but the demographic strength of the country is capable of finding a solution to all such challenges.
“If there are lakhs of challenges then the country also has power which gives crores of solutions, my countrymen who give us the strength of solution,” PM Modi said.
Endless possibilities with the right Mindset can bring huge monetary and social advantages to citizens across demographics and also help in transforming the nation into an economic superpower.
