India has left China behind as the fastest growing major economy. The economic growth of India in 2015 was 7.5%. China’s economic growth, on the other hand, was 6.9%, confirms official figures.
Although, it happened earlier, this is the first instance in this millennium. IMF stated that there were previous instances of India leaving behind China in economic growth. It happened in the years 1981, 1989, 1990 and 1999.
The Government of India said that growth in October to December quarter was 7.3 percent. Delhi’s Central Statistics office affirmed that the economic growth would reach 7.6 percent in 2016 which is higher than 7.2 percent reached in 2014.
According to The Telegraph, this is the right time for India to grab the opportunity to shine. The fall in oil prices has become a boon for the country. It has helped the country in controlling the food price inflation. The present government which is pro-market has also reinforced the prospects of the country.
Prasanna Ananthasubramanian, chief economist at ICICI Securities said, “The drivers of growth from the data suggests that government spending and consumption spending are really strong.”
However, some economists are emphasizing that the latest growth figures are in conflict with other data. They are pointing that weak exports, railway freight, cement production and investment are some areas which are lagging behind.
Ritika Mankar Mukherjee, an Ambit economist in Mumbai said, “India is not the fastest growing economy in the world…No matter how you cut it, while there are certain segments of the economy holding up such as IT or e-commerce, large parts of the economy are actually slowing down.”
Geoffrey Garrett, Dean of Wharton School of the University of Pennsylvania, said that India lags far behind China in investment, manufacturing and physical infrastructure. He stated, “India invest about30% of its GDP, compared with about 50% in China. Manufacturing is about 20% of the Indian economy, compared to China’s about 30%. China has arguably the best physical infrastructure outside the western world.”
Nevertheless, India has already started improving though there are still some parts of the economy that need some works.