World Economic Scenario and Rising India

The Russia-Ukraine war has once again disrupted the world economic scenario. And this has happened at a time when countries all over the world were only beginning to struggle out of the horrific economic slowdown caused by Covid. The new war once again underlines the fact that in the twenty-first century, when the world has shrunk into a global town or village, a conflict between any countries anywhere will impact the economic situation of countries all over the globe.

Against the backdrop of this war, the economic growth rates of most countries have fallen considerably. But the Economic Survey Report 2022 of the United Nations shows that this has not affected India in any significant way. The UN report says that India will continue to expand as the fastest growing economy in the world. It is predicted that India will grow at a rate of 6.4 percent in the financial year 2022. The report that the UN brought out in January 2022 had predicted that India would grow at a rate of up to 8.8 percent. At the same time, the UN has brought down the expected growth rates of economic powerhouses like the United States, China and the European Union. The UN report has reduced the expected growth rate of the European Union from 3.9 percent to 2.7 percent and that of the United States from 2.6 percent to 1.8 percent. The report says that China will grow at 4.5 percent in 2022 and 5.2 percent in 2023. India is exhibiting such enviable economic growth while the economic situation of the world’s strongest countries is slowing down. Every Indian can take pride in the fact that developments in the various sectors in the country justify the prediction that India will be the next super power and spiritual leader of the world.

The war in Ukraine has seriously hampered the return to normalcy of global economies that were decimated by the Covid pandemic. Inflation, price rise and similar threats faced by countries globally are the side effects of this. The rise in the cost of production of food in Europe has created a crisis.

Global inflation is expected to rise to 6.7 percent in 2022 itself. The remarkable increase in food prices and energy are the cause of the rise in inflation. The UN report indicates that with inflation on the rise, the global economy will grow only at 3.1 percent in 2022. India, which is the largest economy in the region, has also been affected by inflation. The lack of self-sufficiency in fuel, particularly crude oil, is the cause of the inflation and price rise in India. The domestic economic situation of the country will be affected negatively when the countries on which India depends for oil imports get into conflicts. Yet the report prepared by the Economic and Social affairs wing of the United Nations says that India’s growth in the next two years will be good. The central government’s decision to reduce tax on petrol and diesel is very creative and will help to reduce inflation and to ease the financial burdens on society and human life in general. Decisions like these will infuse more energy into the economy and the life of the people.

While the Covid pandemic slowed down economic activities all over the world, India used that opportunity to modernize the methods of financial transactions. India succeeded in extending digital financial transactions beyond urban centers to rural areas. This placed India at par with or perhaps even ahead of the world’s most developed countries in terms of digital economy. The Reserve Bank’s figures show that the promotion of digital transactions by banks has reduced the cost of printing currency by one thousand crore rupees in the very first phase itself. Making digital banking transactions possible even through post offices has ensured enormous public involvement in this area. The implementation of 5G services will create a revolution in the area of financial transactions. The increase in the speed of communication will create a new scenario in the field of production and trade. Prime Minister Narendra Modi has declared that India’s transition to 6G will happen very soon and that it will be based on technology developed indigenously. This is a trumpet call that ushers in great developmental leaps. The United Nations testifies to the fact that India is successfully surviving the side effects of international calamities like the Covid and the war, just like it amazed the world by surviving the economic slowdowns of 2008 and 2013. The merciless looting by the English and the Mughals could not douse the energy that shines deep in the heart of India. The world will continue to be awed by this unquenchable energy.

(The writer is the Chairman of the World Hindu Parliament and a former President of FOKANA)