Indian Economy Expected To Take Germany’s Place By 2022
IMF (International Monetary Fund) has made a new growth projection regarding Indian Economy. It states that Indian Economy by 2022 take Germany’s place by being the Fourth Largest Economy. This will push Britain out of the list of Top-Five Biggest Economies.
But it also states that for becoming such a great power, the country has to overcome many challenges. Including a repair in the tax system and restoring the productivity, the economy has to work over its employment opportunities and corporate investments with infrastructural development.
Indian economy is currently going through a lot of crisis. It can either be demonetization, in which 86% of the currency got sucked and now the GST introduction which will take its time in implementation. Though GST is still at the doubt line for being a sustainable step, but the economists are also worried about the Indian banking system and public finances situations.
16.6% of the total loans is under bad loans, restructured debt and advances to companies that can’t service their debt, and this level of bad loans has forced the banks to start recovering bad debts. With this the loan growth is falling at a fast pace and is affecting PM Modi’s plan of reviving investments and boosting employment.
It’s not just about investments, the Labor Productivity per person employed that also acts as an important factor in economic development, has decreased from 10% in 2010 to 4.8% in 2016. According to the International Labor Organization, output per worker is at $3,962 for India in 2017, a fraction of Germany’s $83,385.
Even after this entire crisis, Indian Economy growing at the speed of 9.9% every year will surpass Germany by 2022 being the fourth largest economy in the world.
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