The fast-paced growth of Indian economy has poised India to overtake the UK and become the 5th largest economy in the world in 2019, if the country gets past the pitfalls that await through the year.
Not just in terms of population, India is now running the race to become one of the top five largest economies in the world. In 2018, the country’s economy bloomed at a pace, much faster than most major nations in 2018 and with the same speed, India is poised to overtake UK and become the 5th largest economy in the world in 2019. However, the journey to become number five will be filled with a number of domestic and international pitfalls that can batter down the overall economic growth of the nation – the general elections being one of the major factor.
The outcome of the Lok Sabha election 2019 due in May will be the most influential factor which can potentially kick down, the already demonetisation and GST battered economy. As India braces itself to conduct the world’s biggest election, the NDA government is pressured to fasten their vote banks by boosting spending amounts – especially to please the rural and agricultural section. The government is already exceeding the defined annual budget targets, and yet, might be required to pass the farmers’ loan waivers. Besides the government fund deficit, failure of the incumbent government in the next elections will be seen as a red flag among investors in terms of policy continuity – that can mar down the growth rate.
Besides this, domestic factors like the government’s attempts to undermine and take control of the central bank and its surplus capital, and the rising public pressure to bring down fuel prices and taxes can spook and damage the growth rates. Other factors like global economic slowdown seen in influential global economies like the US and China will be less favourable for India’s growth, as it might weaken the exports, manufacturing and the investment cycle. Hence, the Indian economy is in a limbo to become the 5th largest economy in the world, or go down.