MARCHASIA BUSINESS OUTLOOK8HOW INDIA CAN BECOME THE FASTEST GROWING ECONOMY IN ASIABy Asia Business Outlook teamIndia has developed as the world's fastest growing major economy, and it is predictable to be one of the top three financial powers in the next 10-15 years, owing to its robust democracy and strong partnerships. India ranks 145th and 122nd in terms of GDP per capita. Since the turn of the century, annual average GDP growth has ranged between 6% and 7%, and from 2013 to 2018, India was the world's fastest growing significant economy, outperforming China. Historically, India was the biggest economy on the planet for the vast majority of the two centuries from the first until the nineteenth century .India is gaining traction, fueled by a recovery in industrial output and growth in core sectors, as well as relatively focused government initiatives and policies. While the economy is reviving as a result of the fading effects of the third wave and a rapid vaccination drive, some of the most distressed sectors are gradually gaining momentum.Amid Covid-19 ,recent high frequency indicators are indicating a positive trend and boosting both business and consumer confidence. Rail and flight activity, passenger traffic, power consumption, e-way bills, and Goods and Services Tax (GST) collections are all on the rise. The Indian economy's long-term development prospects stay behind positive due to its young population and low dependency ratio, healthy savings and investment rates, rising globalisation in India and integration into the global economy.Market SizeAs demand recovers and industrial indices improve, financial institutions in India are experiencing a surge of optimism. The Reserve Bank of India (RBI) and the International Monetary Fund (IMF) both forecast 9.5 percent GDP growth for India in fiscal year 22. Foreign investors are also optimistic about the economy, as evidenced by a 23 percent increase in FDI inflows in 1Q22 versus 4Q20. According to the Hurun Global Unicorn List, India has the fourth-largest unicorn population in the world, with over 21 unicorns worth a total of $73.2 billion. According to the Nasscom-Zinnov report 'Indian Tech Start-up,' India is expected to have 100 unicorns by 2025, with 1.1 million direct jobs created. In a nutshell, the Indian economy is likely to recover, aided by industrial resurgence, increased demand, and policy intervention. However, a growing trade deficit, inflationary pressures, and scepticism about the third wave of COVID-19 could slow the recovery.Recent Investments in Keys SectorsPrior to the pandemic, data from the World Bank showed that India's gross fixed capital formation(investment) rate had fallen from 36% in 2007 to 27% in 2019. The vulnerability of India's financial sector, combined with poor export performance and delays in privately funded projects, slowed investment in the decade preceding Covid-19. These challenges have IMPRESSIONS
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