In 2022 India will overtake Germany as the fourth largest economy in the world and will push Britain out from the top five, as per the analysis of growth projections by the International Monetary fund. There are many but the challenges the South Asian Nation must surmount to get.
Executing a wide ranging incudes the overhaul of the tax system, the biggest pile of distressed to be sorted among major economies, reviving lacklustre productivity, increasing employment opportunities substantially, encouraging corporate investment and overcoming a significant infrastructure shortfall.
India’s economy is still improving from a ban of cash that sucked about 86% of currency in the end of the last year. Then there's the likely near-term disruptions from the implementation of a nationwide goods and sales tax; indeed the government has already missed an April deadline for putting the tax in place and is now working against the clock to meet its new 1st July goal.
For GST there is little doubt as it will be beneficial in the long run, cornered by the Economists about India’s banking system and the health overall of public finance. Both seen as lightning rods for global credit agencies that already rate Indian debt just above "junk'' status.
Restructured debt and advances the bad loan to companies that cannot service their debt have risen to 16.6% of the total loan, data shown by the Government. In bad loans the spike has forced banks to focus on recovering bad debts. Loan growth has fallen as a result, to near record lows, posing a challenge to PM Narendra Modi’s Government as it seeks to revive investment and employment boost.
A far from investment slowing, labor productivity of India has been weakening, limiting growth and opportunities of employment.
Per person employed of Labor productivity eased from 10% in 2010 to 4.8% in 2016 as sputtered reforms. As per the International Labour Organisation, the worker output is projected at $3,962 for India in 2017 ad fraction of $83,385 of Germany’s.
The Potential still remains, on the Gross Domestic Product the ranking their countries and regions for 2017 and 2022 based on IMF forecasts, India, growing at 9.9 percent a year in nominal terms, surpass Germany by 2022 as the fourth largest economy in the world, with the U.K dropping out of the top five after 2017.
India may outshine its former colonial master, some seven decades after independence.