Indian economy is surging up by 7.5%. This exciting news comes from PMO (Prime Minister Officiate) Delhi. Indian economy has been growing at 7.5% since February this year. Is this Modi effect? Experts are saying that it is not Modi effect fully though new government has shown some really good signs. These things are leading some big investments in India. Now the GDP growth of the last three month (first quarter) has shown a positive sign to the industrialists.

Indian economy is growing by 7.5%

Indian Economy Grows by 7.5% in the first quarter of 2015

Foreign investments are rushing in India as the new government are showing industry friendly approaches. But the last quarter of this year has been showing a positive curve and soaring up with 7.5% GDP growth. According to the experts, banking and insurance sectors have shown a splendid growth. Pradhanmantri Yan Dhan Yojona has taken a good effort here to pick this thing up.

Indian Economic Growth and Automotive Industry

Many automotive companies are investing for their new plants and for capacity building of their old plant. Indian and foreign both companies started building and expanding their capacities. Maruti Suzuki, Volkswagen, General Motors and Tata have already invested thousand crores to build budget friendly small cars with an aim to meet the expectation of Indian consumers.

But Automotive industry sector has shown a negative slide down in last quarter. It shows minus 2.4% slide. According to the experts this was happen due to the unstable market and continuous unrest in middle east that affects crude oil price. and in India price of everything depends on the price of the crude oil as Indian imports its maximum oils from the middle East countries.

Interest Rate Cuts Down by RBI

To take the growth forward RBI has cut the interest rate down in January by 500 points basis. Interest rate was come down by 0.5%. If GDP grows with this rate, it is expected that RBI will go for more cut in interest so that industries can take easy loans in less interest rate. Ultimately that will trigger the growth more.

India & China | GDP Growth Rate in the Last quarter (Jan-March)

India is growing with the expected rate. Though IMF predicted that India would grow at 6.6% in the first quarter. But beating the prediction, India sets a record and touches 7.5%! What a performance! China is also growing but not this rate. For the first time in last few years India has beaten China in growth in a particular quarter. China’s economic depression was started due to the false boom in construction sector.

India’s New Economic Challenges- Growth and Sustainability

Experts are very cautious before making any comment on this topic- India’s economic boom in the first quarter of this year, 2015. Because before a year China experienced the same thing. Their economy was growing leaps and bounds, even was growing at the fastest rate in the world. Then what happened, everyone knows it. False demand bubbles burst and China’s economy entered in a dark chapter. Many ghost cities were popping out. Some cities which were built to flow down the pressure of from a mega city, went deserted. Bubbles in Construction sector also burst away.

India’s new challenge is to sustain the growth and fueling the growing sectors. That’s why recently India has changed labour laws and some other industrial laws to ease the procedure of getting investment.

India’s Growing Economy- What to do else to sustain the growth

India’s biggest Challenge will come in front. That is to sustain the growth and retain the positive curve of the GDP’s growing character. What India will do retain the growth, we can make some assumptions-

1. Government will slash the tax burden down from some sectors.

2. Government of India will encourage Eco friendly industries by eloping some taxes.

3. For PPP (Private Public Partnership) venture, government should assure the returns and will take necessary actions to make those ventures profitable.

Narendra Modi & Indian Economy

It was in their agenda before the 16th parliament election in India that they would concentrate on strengthening the economy of India. To meet the expectation and huge pressure from the growing yuva (young) population, government is heading up for rapid industrialization in all sector. For triggering up the industrialization RBI has already lowered the rate of interest two times within three months.

Modi’s Foreign Visit in search of New Investments

Narendra Modi’s government has taken some visionary steps to market the potentials of India as manufacturing hub of the world. Whenever he visited any country, he always emphasizes to manufacturing facility of India. To strike the point, government of India is marketing the “Make in India” initiatives in European countries to fetch the investments from there also. Recently He visited China and arranged a grand meeting with the top notch industrialists there that includes Jack Ma, chairman of Alibaba and President of Xiaomi Inc. Alibaba is trying to get into the sub continent’s market where Xiaomi has done incredible job with their entry level smartphone in India. They hit the exact point of need of Indian consumers- Price and features.

Make in India- Indian economy

Rise Asia, Make in India and Indian Economy

Almost all economies in Asia are showing positive growth in the last quarter. Japan, China and India are leading on the top. Capitalizing the power of employable youth generation and availability of raw material, India can surge up easily and can not only retain the economic growth of 7.5% but also can reach 9% in a year. Stability of the central government and relation with the states will play a big role there. Prime minister Modi arranges meeting with the chief ministers of the states in every two months to analyze the over all growth of economy and other issues. This is an important step to neutralize the political issues over economic development of country. With the Make in india planning, Central government has already asked reports on land, infrastructure availability etc from the states to chalk out the whole plan for positioning the upcoming industries.

According to an expert of public funding,

 “Changes will be visible after a year of establishments of new industries and foreign funds, immediate changes will come in share market only but over all change will come out after a year minimum, only then we can”.  

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