While economists, investors and executives are still wondering how growth could have been so high during those quarters when other indicators suggested times were tough, the new official numbers mean that India outpaced China, taking the pole position as the fastest-growing major economy in the world.
India has been able to catch up because China’s growth has been slowing. The Middle Kingdom’s GDP expansion was 7.3% in both the third and fourth quarters of 2014. While there are smaller economies which may have had stronger growth, this puts India on top after decades driving in China’s slipstream.
Of course, China’s economy is still four times the size of India’s.
“There’s no comparison between these growth rates because of the size of the economy of China,” said Ashish Kumar, director general of the Central Statistics Office as he announced the new GDP growth numbers. “If this kind of growth continues and China continues to perform at a lower level, then still it will take 20 to 30 years to catch up.”
Still, if it can keep up this pace at least India will be gaining some ground. More importantly, a return to high growth might mean India is following in China’s footsteps and entering a take-off phase.
The South Asian nation needs to revamp its economy to help create more manufacturing jobs and savings if it wants to become the next China, said Frederic Neumann, an economist at HSBC in a recent report.
“That’s a challenging transformation,” he said. “India may never quite match the rapid ascent of China, but even at a slightly slower speed it will start to make waves.”
-----------------------------------------------------------------------------------------------------------------
>>
In India base year is changed after every 5 years - last such change was done in 2010 when the base year was changed from 1999-00 to 200-06 - The next such change will be in 2020.
>> It's
not Modi but National Statistical Commission which is an independent organization - this was the same organization which revised it some 5 years back in 2010. It that had been the case then the RBI wouldn't have asked for some more time to study the data.
>> The economy is doing better now than it was in 2013. Indeed India has been a rare bright spot among emerging markets. Mr Modi’s pro-growth government won a healthy mandate in elections last May and after a slow start, it has pursued its reform agenda more urgently in recent weeks. The stockmarket has boomed, in part because foreign investors remain keen buyers of Indian assets, even as they pull money from other emerging economies. The rupee is firm.
The central bank has even expanded its foreign-exchange reserves to a record $330 billion—thus keeping the rupee from rising by more.
The economy is likely to pick up further. The recent falls in commodity prices, which have hurt raw-material exporters such as Brazil, Russia and South Africa, are a boon for India, which imports 80% of the oil it consumes. Rich economies may fret about the dangers of falling prices around the world; Indians, on the other hand, are pleased they no longer have double-digit inflation at home.The diminishing threat from inflation has already prompted India’s central bank to reduce interest rates in January, from 8% to 7.75%.
>> If there would have been any fluctuations in investment coming in then it would have been reflecting in the stock markets instantly.
>> Thanks to the well informed investors - India ranks #4 in top FDI destinations with an annual FDI inflow of $35 Billion.
I dont expect the trolls will understand your explanation.
@Chanakya's_Chant
