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India has ousted China as the world’s fastest growing major economy. The South Asian country posted 7.2% growth in the last quarter of 2017, beating China’s GDP growth of 6.8%. The two countries, both with populations well over 1 billion, have been trading places back and forth at the top of the rankings for fastest growth among major economies.
Despite the rapid growth, India’s population growth demand even faster expansion by its economy to soak up all the new members of the workforce entering each year. Despite Prime Minister Narendra Modi’s successes so far, some are wondering if his policies can produce the rate of growth the country needs. Anant Vijay Kala reports:
GDP growth had dipped below 6% in the first half of last year as demand was hit by Mr. Modi’s decision to void most of the currency in circulation—a move aimed at stemming corruption and bolstering cashless transactions. The government also implemented a new nationwide goods and services tax, confusing some businesses with new rules.
While India’s economy is growing at an impressive pace by global standards, it needs even-faster expansion to provide jobs to the more than 10 million Indians entering the workforce each year.
Pressure is growing on Prime Minister Modi, who promised his policies would help create millions of new jobs. His biggest moves to modernize an economy in which many businesses operate outside the formal system were initially widely lauded, but doubts have grown about whether they were worth the pain.
Mr. Modi argues that these policies have helped pull India out of what was known as the “fragile five” group of economies—which include Turkey, Brazil, South Africa and Indonesia—and will lead to longer-term gains.
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