India’s growth story is changing and a major catalyst in this transformation is the country’s most populous state of Uttar Pradesh.
As Prime Minister Narendra Modi put it in his inaugural address at the UP Global Investors Summit 2023, India under the new dispensation “is carrying out reforms not out of compulsion, but out of conviction.” He highlighted how Uttar Pradesh is now known for “good governance, peace, law and order, and stability”, adding that the state is “witnessing holistic development.”
“Along with infrastructure, UP has changed its attitude and approach for ease-of-doing business, and is driving the growth of New India,” the PM emphasised.
Rapid economic recovery
“Every credible voice in the world is optimistic about the ascending course of India’s economy that has not only shown resilience but also rapid recovery in the face of the pandemic,” he said.
The Prime Minister used the occasion to welcome members of Parliament elected from Uttar Pradesh and lauded the state’s initiatives for development, saying it has become a source of hope and inspiration.
He pointed out that from being a BIMARU (an acronym formed from first letter of the states of Bihar, Madhya Pradesh, Rajasthan and Uttar Pradesh, indicating the poor economic conditions there) state, “UP is now giving leadership to India’s growth.
The Prime Minister reminded investors from all over the world that they were now in a state with a population of 25 crore. “Uttar Pradesh has more potential than many other countries,” he added.
He said despite the pandemic and the “shock” of the war at Ukraine, India has emerged as the fastest growing economy in the world. “India not only showed resilience at the time of an economic crisis but also made “a quick recovery,” he said. The PM attributed this to the grit and determination of the people of India.
“The growing faith of Indians in themselves and the rising self-confidence played a key role in overcoming the challenges posed by the pandemic and the Ukraine war,” he said.
PM Modi underlined the growing allocation for infrastructure and opportunities for investors in health, education, social infrastructure and green energy sectors.
The PM’s narrative about India’s growth story is not mere rhetoric. Investors the world over believe him because what he says is based on facts.
In January this year, India surpassed China to become the world’s most populous country with a population count of approximately 1.417 billion as against China’s 1.412 billion. This creates both opportunities and challenges for India.
The only bright spot
While this expands the human capital base, thereby, enhancing the productive capacities across economic sectors, it also adds urgency for effective education and health programmes, skilling initiatives, and job opportunities to ensure the productive use of human capital.
Despite the global turmoil as a result of the dual shocks emerging from Covid and the Ukraine-Russia war, the long-term growth story of the Indian economy remains the only bright spot in the dismal global growth scenario.
This has helped attracting foreign investments in the country, with FDI inflow reaching an all-time high in 2021-22 at almost $85 billion.
India’s emergence as the world’s fifth-largest economy, overtaking the United Kingdom in 2022 marks the beginning of the ‘India era’ in the global growth story: it is set to surpass Japan and Germany to become the world’s third-largest economy by 2029.
India’s market size
One needs to take into account the size of the domestic market in India. One of the advantages with China over the last decade has been the massive size of the domestic market with its huge population base and rising per capita incomes.
The only alternative to compete with such a market size and with increasing incomes is India, which presents a large market with a huge population of 1.3 billion whose incomes are increasing at 6.9 per cent per annum as per recent estimates. There is no doubt that globally, the bright spot in the dismal backdrop is a resurgent Indian economy that has risen from the ashes like a phoenix after a year of negative growth caused by the pandemic-led lockdown.
India’s 74th Republic Day recently not merely marked a remembrance of the past, or a celebration of adoption of Constitution, it was also a celebration of the dazzling future of a roaring economy that will show light to a dreary world.