INTHEBLACK June 2022 - Magazine - Page 32
F E AT U R E : E C O N O M I E S S E R I E S
// I N D I A
“INDIA’S SCALE IS EXTRAORDINARY. BY 2025, ONE-FIFTH
OF THE WORLD’S WORKING-AGE POPULATION WILL BE
INDIAN. BY 2035, INDIA’S FIVE LARGEST CITIES WILL
HAVE ECONOMIES COMPARABLE TO MIDDLE-INCOME
COUNTRIES TODAY.”
MUNISH SHARMA, AUSTRADE
range of fiscal, monetary and health responses to the
crisis [have] supported its recovery and, along with
economic reforms, are helping to mitigate a longerlasting adverse impact of the crisis”.
Deloitte India is also upbeat about the economy,
projecting it will grow between 8.7 per cent and
9.4 per cent in the 2021-2022 financial year, before
expanding 9 per cent in 2022-2023 and 7.5 per cent
the year after.
The caveat could be if significant COVID-19
outbreaks occur. “While we expect limited downside
risks, we will be watchful of any increase in infection
cases or variants that reduce vaccine effectiveness in
the near term,” says Dr Rumki Majumdar, economist
and associate director at Deloitte India.
On the back of accelerated rates of vaccination and
the Indian Government’s well-calibrated regional
mobility restrictions, she expects rising consumer
and business confidence to result in higher spending.
Strong demand for agricultural products has buoyed
rural communities, while positive data for e-way
goods consignments, industrial production within
key industries, GST collections and electricity
32 ITB June 2022
consumption suggest the recovery is broad-based,
according to Majumdar.
Research consultancy Capital Economics is even
more optimistic than the IMF about India’s economy,
tipping it to grow in excess of 10 per cent in 2022.
The group’s Asia economist Darren Aw says betterthan-expected tax revenues have contributed to India’s
improving fiscal position.
However, Aw also notes that there is an inevitability
to the sharpness of India’s economic rebound, given
that it comes off such a low base. “The national
lockdown in 2020 resulted in India having the
sharpest contraction in the world,” he says.
INVESTMENT POTENTIAL
As international investors and exporters weigh up
their options in a pandemic-stricken world, Austrade
believes there are many positive signs emanating from
India, including the competitiveness of the services,
manufacturing and export sectors.
Sharma says these markets are “an important litmus
test” for the overall economic health of the country.
The real question for Australian companies and others