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India on the verge of becoming Economic Power

The World Bank has stated that India will see the great economic recovery amongst all the developing countries, so the next four to five years from 2014 onwards are the time to watch out India keenly .The expansion of Indian economy will go up to 2.3% from 4.8% to 7.1% by the year 2016.

 A) This year we can expect to see a global growth on economic fronts, of course the economic improvement will be led by the rich countries despite the fact that they are down by fiscal measures . Even the U.S. has seen back to back ten quarters of output expansion .Europe is the most sluggish all due to fragile recovery during the past two years contraction .

B) Recovery of demand in rich countries will give a boost to exports from developing countries like India , and this strong external demand will provide the buffer for the Indian economy at the time when the domestic activity is weak. In the past few recent months there is significant growth in net exports all due to strong recovery in the U.S. The downward pressure on global commodity prices could also help a commodities exporter such as India, for example global oil price are assured to fall. The economic growth rate of China will remain at the current levels or show marginal growth where as the economic growth of India will accelerate.

C) The economic growth in the developing countries is just a shade lower than what it was during mid of the past decade and the economic growth of India will continue to be higher than the rich countries and will be much more impressive than in the last two decades that is 1980 to 2000.

D) India has now a substantial growth rate of 7 % and in the coming years there will be no imbalance generated between inflation and CAD .

E ) The two things have to be watched about China -- their exports and domestic demands ,Increase in investments and increase in consumer spending capacity. This is for sure that the Indian economy cannot loose  further momentum  from here .Strong demand in rural market plus a good monsoon will support will support our growth and recovery .Stronger rural and urban demands and of course the external demands will unleash the chains in the feet of the Indian economy. But there must be domestic policy support, and then there is inflation and a negative output gap. Then there must be an upswing in the investment cycle. 

The foreign as well as the domestic companies must invest in new capacities and so also expand their existing capacities, policy clarity, economic reforms and the economic stability. The most eagerly awaited elections till date in this coming may 2014 will see which will herald the seat in New Delhi and take charge and what subsidies the existing government will offer .The launching pad is all set to get India on the express highway of economic recovery .