Zee Media Bureau
New Delhi: Seeing an opportunity in the recent turmoil in China's equity and currency markets, Foreign media is saying India can overtake China as the driver of world economy.
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"Now India’s resilient consumer spending is an advantage as demand decelerates almost everywhere else. It is luring companies to produce in India and, the government hopes, can help spark a belated industrial revolution in the country of 1.2 billion." says the Wall Street Journal in a report.
"For years, growth in India has been fueled more by domestic demand—not, as in China, by manufacturing goods for sale abroad, " the newspaper said.
It further said India hasn’t been rattled as badly as Brazil, Russia or South Africa. Its international reserves are ample, and it isn’t highly dependent on foreign capital to fund imports.
The report also adds that the large population of India who are buying more stuff than they used to. That is a hook for growth-hungry companies and investors, even if India’s output is still too small and its people too poor to become a replacement engine for the world economy.
Recent turmoil in China's equity and currency markets is proving to be India's gain, with share prices in the south Asian nation reviving as investors who cut their holdings earlier this year switch out of Chinese equity markets and back into India's.
The world needs other engines to carry the growth process. And in a slowdown environment in the world, an economy which can grow at 8-9 percent, like India, certainly has viable shoulders to provide the support to the global economy.
Indian economy grew by 7.3 percent in 2014-15 and is estimated to grow by 8-8.5 percent in the current fiscal.
In an environment where there is a relative global slowdown, India seems to be doing reasonably well.
According to International Monetary Fund (IMF), India will overtake China as the fastest growing emerging economy in 2015-16 by clocking a growth rate of 7.5 percent.
On the other hand, China will witness a deceleration with growth rate sliding from 7.4 percent in 2014 to 6.8 percent in 2015 and 6.3 percent a year after.
Meanwhile, RBI Governor Raghuram Rajan had said it will be "a long time" before India can replace China as a growth engine for the global economy, even if it grows at a faster rate.
On the other hand, Finance Minister Arun Jaitley said, "I see this as a great opportunity. The Chinese normal has now changed. It is no longer the 9 percent, 10 percent, 11 percent growth rate".
