A Decade of Economic Transformation in India

The economy, in the past ten years, not only just made into the top five economies of the world but is slated to enter the top three league in the next couple of years….reports Asian Lite News

While the Centre and Opposition may spar over the country’s growth trajectory in the past few decades, there is no denying the fact that the economy logged a significant uptrend during the Modi government, starting from 2014 to 2024.

The economy, in the past ten years, not only just made into the top five economies of the world but is slated to enter the top three league in the next couple of years. Economic indicators have shown a remarkable jump, GDP growth and exports have seen robust growth while Forex reserves and FDI have also seen a significant rise in the last ten years.

Opposition parties though remain unconvinced with the numbers and allege juggling of data by the ruling party to build a pro-government discourse. However, an analysis of the ‘growth data’ from 2014 to 2024 goes to show how the economy grew in the last ten years, under the Modi government.

Below is the lowdown on data, as existed in 2014 and 2024:

In the fourth quarter of 2014, the GDP growth stood at 4.6 per cent, which rose to 8.4 per cent in the third quarter of 2024. Exports for the financial year 2014 stood at $ 466 billion which rose to $776 billion in financial year 2023.

Forex reserves and Foreign Direct Investment (FDI) in the FY 2014 stood at $303 billion $ 36 billion respectively. Both soared to new highs and more than doubled in 10 years to $645 billion and $83.5 billion respectively.

Inflation and Current Account Deficit, the other crucial indicators declined from 8.7 per cent and 5.1 per cent to 4.8 per cent and 1.2 per cent respectively, in the last ten years.

Other set of data related to interest rates also goes on to show how the common man benefitted from the significant drop in rates.

As per data, the education loan which stood at 14.25 per cent in 2014 has now lowered down to 8.15 per cent. Loans like house loan, auto loan and personal loan, all have taken a dip in the last 10 years.

House loan and Auto loan stood at much above 10 per cent before 2014 but today they are in the range of 7-8 per cent. Personal loan during 2014 was 14.25 per cent and has now slumped to around 10.50 per cent.

U.S. dollar banknotes in Washington. (Xinhua/Liu Jie/IANS)

India’s Forex Reserves Hit Record High: $648.562 Billion

 India’s foreign exchange reserves went up by $2.98 billion during the week ended April 5 to scale a new all-time high of $648.562 billion, data released by the RBI showed on Friday.

This is the seventh consecutive week marking a jump in the overall reserves. The forex kitty had increased by $2.95 billion during the preceding week ended March 29, after notching a cumulative $26.5 billion rise in the previous five weeks.

Gold reserves, which also form part of the forex kitty held by the RBI, shot up by $2.398 billion to $54.558 billion during the latest week, while foreign currency assets increased by $549 million.

The Special Drawing Rights (SDRs) were up by $24 million to $18.17 billion.

RBI Governor Shaktikanta Das referred to the record foreign exchange reserves as a reflection of the strength of the Indian economy.

“It is our prime focus to build a strong umbrella, a strong buffer in the form of a substantial quantum of forex reserves which will help us when the cycle turns, or when it rains heavily,” Das said while unveiling the first monetary policy review of the current financial year that began on April 1.

Rising foreign exchange reserves are a positive sign for the economy as they reflect an ample supply of dollars that help strengthen the rupee.

An increase in the foreign exchange reserves gives the RBI more headroom to stabilise the rupee when it turns volatile. This is because the RBI intervenes in the spot and forward currency markets by releasing more dollars to prevent the rupee from heading for a free fall.

Conversely, a declining forex kitty leaves the RBI less space to intervene in the market to prop up the rupee.

India’s forex reserves, including the central bank’s forward holdings, can now cover more than 11 months of imports, which is a two-year high.

The RBI Governor also said the Indian rupee remained largely range-bound as compared to both its emerging market peers and a few advanced economies during 2023-24 and was the most stable among the major currencies during this period.

“The depreciation of Indian rupee at 1.4 per cent against the US dollar in 2023-24 was lower as compared to emerging market peers like Chinese yuan, Thailand baht, Indonesian rupiah, Vietnamese dong, Malaysian ringgit and a few advanced economy currencies like Japanese yen, Korean won and New Zealand dollar,” he said.

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