India to benefit from Chinese slowdown

A HT to my good friend Kanchan Bandyopadhyay for this piece in ‘The Times of India’. Amid the global economic gloom, triggered by a slowing Chinese economy, most economists maintained that India’s growth prospects were brighter than those of other emerging markets. Here are a list of reasons:

1. GDP growth estimated at 8% in 2015-16. India considered a bright spot in global economy
2. Improving industrial output: Up 3.8% in June compared to 2.5% in May
3. Healthier government finances: Improved tax collections, led by indirect tax growth of 37.6% during April-July Lower subsidy bill due to falling oil prices; expected savings may be around Rs 1 lakh crore
4.Inflation, both retail and wholesale, under control. Retail inflation estimated at 3.8% in July; wholesale inflation at -4.1%, the ninth straight month of contraction
5. Better than expected monsoon rains; deficit of around 11% but distribution has been encouraging
6. Lower trade deficit due to a fall in import bill for crude petroleum, gold
7. Current account deficit appears more manageable at 1.3% of GDP in 2014-15 compared to 1.7% in 2013-14
8. Forex reserves at a record $355 billion
9. Early signs of increase in investment
10. Healthy demand in consumer sectors, uptick in consumption

Here is a very informative graphic – The Elephant v The Dragon.

elephant v Dragon

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