INTHEBLACK June 2022 - Magazine - Page 36
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 IS COMING OUT OF THE PANDEMIC’S SHADOW AND,
IF THERE ARE NO OTHER SEVERE INFECTION WAVES, THE
NATION’S RECOVERY WILL TAKE OFF AT A RAPID PACE AND
WILL LIKELY RESULT IN THE WORLD’S FASTEST-GROWING
ECONOMY.”
DR RUMKI MAJUMDAR, DELOITTE INDIA
think the stock markets in India could do a bit
better than elsewhere in the emerging world.”
Majumdar says rising inflation, deteriorating
household balance sheets, a weak labour market
and the possibility of a financial contagion due to a
global liquidity squeeze are potential risks that could
hurt consumer demand. She notes that India is a
consumer-driven economy, with consumption spending
accounting for about 60 per cent of GDP.
“Policymakers must recognise and address the risks
looming over pent-up demand and take quick actions
to prevent these factors from spinning out of control,”
she says. Possible steps, according to Majumdar, could
include creating jobs, income and demand in the
economy for sustainable growth.
SUSTAINABLE SUCCESS
With an eye to India’s future prospects, Sharma
says the country’s economy is too complex for its
growth story to be linear. “Its economic progress will
be uneven and at times incremental, constrained by
the political compromises demanded of a diverse
democratic federation,” he says. “To succeed, India
36 ITB June 2022
will need to sustain long-term growth to enable
job creation over time for its young population
and identify the economic fundamentals behind
sustainable growth.”
To create the right institutional framework for
investors in the years to come, Majumdar calls on the
Indian Government to reinforce its roles as a creator
of infrastructure programs, a negotiator of free trade
agreements and preferential tax deals, a facilitator of
incentives, rebates and policy reforms, and an enforcer
of industrial and intellectual property rights.
She adds that policymakers should focus resources
on capital investment – for example, on physical
infrastructure, skill building, and improving public
health and other social infrastructure – as the country
learns to live with the pandemic.
Sustained efforts towards reforms and their effective
implementation will bode well for the economy,
according to Majumdar.
“India is coming out of the pandemic’s shadow
and, if there are no other severe infection waves, the
nation’s recovery will take off at a rapid pace and will
likely result in the world’s fastest-growing economy.”