According to an Economic Survey tabled in Parliament, India’s economy is “picking up quite nicely” and will expand by 7-7.5 per cent in 2018-19. If this happens as expected, India will have the distinction of again becoming the world’s fastest growing major economy. This is certainly creditable considering that the Indian economy has gone through two minor setbacks in the form of the GST and demonetization. However, even the most optimistic of economists cannot predict very accurately the kind of challenges that the economy could face from factors like rising oil prices and sharp corrections in the elevated stock prices. The latter is a factor of considerable significance, since the market itself depends so heavily on indicators like the Sensex and other listings of the stock market. The Economic Survey 2017-18, presented in Parliament by Union Fince Minister Arun Jaitley and released just two days before the BJP government is to present its fifth and fil full-year Budget, did not rule out a pause in the fiscal consolidation plan ahead of the general elections due before May next year. The Survey has pegged the GDP growth for the current fiscal year at 6.75 per cent and has said that exports as well as private investments are set to rebound in the coming year. Not surprisingly, the growth rate is a trifle higher than the recent CSO estimate of 6.5 per cent. It will be recalled that the gross domestic product (GDP) was 7.1 per cent in 2016-17 and 8 per cent in 2015-16. It was 7.5 per cent in 2014-15. The general impression is that the current fiscal year has been adversely affected by the rollout of the Goods and Services Tax (GST) and the effects of the demonetization of high value currency notes in November 2016.
While the present health of the Indian economy is good news, it will not do to overlook the fact that there are also global trends that are working towards the expansion of the economies of several countries. It is about a decade since the world descended into a crippling economic crisis. However, today a key marker of the revival of economies has been achieved. As if by a miracle of sorts, every major economy of the world is expanding in unison. There is now a synchronous wave of growth that is creating jobs, swelling fortunes and working to lessen fears of popular discontent. There may not be any clear-cut or comprehensive explation of what is happening to the economy of several countries all over the world that are seeing better days, but there seem to be encouraging signs that the world has filly maged to escape years of a depressing global downturn. The United States had got into a spending spree encouraged by the previous government. The present administration too has gone in for $ 1.5 trillion worth of tax cuts that benefit taxpayers. The world’s largest economy that is into its ninth year of growth can well afford such popular fiscal moves. Europe too has benefited from the effects of cheaper money pumped out by its central bank.
While the expansion of economies has greatly benefited countries suffering from economic crisis, the present expansion of economies and the benefits of growth have been limited almost exclusively to the educated, affluent and politically connected class that has captured most of the spoils in most countries, leaving behind working people whose wages have stagted even though the rates of the jobless have decreased appreciably in some cases. Even so there is good reason for rejoicing that even some devastated economies now enjoy better health. But since there is no guarantee that such economic expansion will be durable, one wishes that they would also bring about better wages and add to the security of the middle class and stoke the urge for better education among the less fortute ones.