2023 - India's Strong Year?
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2023 - India's Strong Year?

At the start of the year 2023, I came across this chart on Twitter, I was intrigued by the predictions made, they are all backed by data as well as hype. The predictions were just predictions of course, but what’s the possibility of it getting true? I thought about following one prediction “India will have a strong year”, I didn’t collect much on articles and was not aware about what was the reason behind this prediction, since it was in the “EVERYTHING ELSE” session. I summarized the news to explain how India had a strong year, the experts were not wrong after all.

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The articles were spilled with economic growth factors, Daron Acemoglu’s Framework distinguishes between "proximate" and "ultimate" determinants of economic growth, and while that serves a lot of it, I tried to include all of it into one. Here are the major factors we are going to focus on to define India’s growth:

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  • Gross Domestic Product (GDP) Growth Rate
  • Investment (domestic and foreign)
  • Trade Openness
  • Labor Force and Skills (Productivity and technological advancements)
  • Labor Market Dynamics Employment (low unemployment rate and job creation) and Entrepreneurship

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  • Education
  • Healthcare
  • Social Welfare - policies supporting poverty reduction, social equity and human development

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  • Stability and Governance
  • Policy Framework - fiscal and monetary measures
  • Infrastructure

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  • Resource Management
  • Green Technologies
  • Access to clean water and sanitation

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  • Global Trade
  • Geopolitical Environment (international relations, peace and stability)

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  • Innovation
  • Digitalization
  • Development

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  • Cultural Dynamism (cultural diversity and creativity)
  • Demographic Trends (Population growth, age distribution)

Let’s discuss India’s development while studying all these factors:

1. Economic Factors:

India’s Current Gross Domestic Product (GDP):

  • $3.737 trillion
  • Previous Year (2022): 3.385 trillion
  • GDP = Consumption (spend on services, non-durable and durable goods) + Investment (spend on housing and equipment) + Government Expenditure (salaries of employees, construction of roads, railways, airports, schools and military expenses) + Net exports (difference between total exports and imports)

Investment (domestic and foreign):

Because China lost favor among global fund managers, a portion of it flows into equities in India

Foreign Direct Investment

August 2023

  • Global Investment Firm Temasek invested Rs. 1200 crore in its electric vehicle subsidiary Mahindra Electric Automobile Ltd (MAEL)
  • Qatar Investment Authority (QIA) invested Rs. 8278 crore in Reliance Retail Ventures Limited (RRVL) to get an equity stake of 0.99%

September 2023

  • Hindalco signed a technology partnership with Metra SpA, to bring the latest aluminum extrusion technology to India for building rail coaches
  • Nvidia Corporation announced separate partnerships with Reliance and Tata group companies to help them develop AI-powered supercomputers, AI clouds and generative AI applications

Domestic Investments

~130 SME companies went public in 2023 (till Oct 2023), raising a total of Rs. 3540 crore through IPOs

Trade Openness:

Overall exports were estimated at USD 62.26 Billion in October 2023, an increase of 9.43 percent over USD 56.90 Billion in October 2022

Overall imports in October 2023 are estimated to be USD 79.35 Billion, exhibiting a positive growth of 11.10 percent over October 2022

Labor Force and Skills (Productivity and technological advancements):

Wheebox India Skill Report 2023, in collaboration with CII, Taggd, AICTE, AIU, Sunstone, Pearson, AWS, and The Economic Times shows positive employability figures, especially among young people and women, and a renewed focus on skilling and women’s participation in STEM fields?

Labor Market Dynamics Employment (low unemployment rate and job creation) and Entrepreneurship:

The third-largest startup ecosystem globally, boasting about 50,000 startups with consistent annual growth attracts private capital and drives innovation.


2. Social Factors:?

Education:?

The New India Literacy Programme (NILP) launched by the Government aims to cover a target of 5.00 crore non-literates in the age group of 15 years and above, implemented during 5 years from the FYs 2022-23 to 2026-27. It has five components: (i) Foundational Literacy and Numeracy, (ii) Critical Life Skills, (iii) Vocational Skills Development, (iv) Basic Education and (v) Continuing Education. Literacy Rate in India increased to 77.7% https://examin8.com/blog/national-curriculum-framework-2023/?

Healthcare:?

Rs. 2.87 crores have been disbursed to 191 facilities and 9 digital solution companies as incentives. Over 300+ facilities were considered for the incentive, during the month of September and October 2023

Social Welfare:?

To mobilize resources for green infrastructure projects which help in reducing the carbon intensity of the economy, the Framework for Sovereign Green Bonds has been brought out by the Government of India during the G20 summit


3. Political and Institutional Factors:?

Political stability and Governance:?

The government has been stable for the past 10 years and has been pulling all its weight to position the country as a global manufacturing hub

Policy Framework:

Mahila Samman Savings Certificate (MSSC) for women's financial inclusion, Sukanya Samriddhi Yojana (SSY) a savings scheme for the benefit of the girl child

Infrastructure:?

The GIFT City in Ahmedabad is developing due to the number of government initiatives to attract investments as an international financial center. The Budget 2023-24 has allocated INR 75000 crores for 100 projects deemed critical to improving the overall multimodal logistics infrastructure.


4. Environmental Sustainability:?

Resource Management: Didn’t notice any new schemes supporting resource management, or it was a lack of knowledge during the research

Green Technologies: The National Investment and Infrastructure Fund launched its first bilateral fund, the India-Japan Fund with the Japan Bank for International Cooperation (JBIC); working with the U.S. International Development Finance Corporation (DFC) to set up a multi-billion dollar green-transition fund?

Access to clean water and sanitation: Most of the ongoing projects are supporting to provide clean water and sanitation to the people in India


5. Global Factors:?

Global Trade:?

International Exhibition-cum-Convention Centre - ‘Bharat Mandapam’ was established, India and USA signed a Memorandum of Understanding on establishing Semiconductor Supply Chain and Innovation Partnership and on enhancing innovation ecosystems, DGFT simplifies and liberalizes policy for export of Drones/UAVs meant for civilian end uses from India?

Geopolitical Environment:?

All the seven ongoing disputes at WTO between India and the USA were resolved after several meetings, India’s G20 Presidency, its role in the War in Ukraine


6. Technological Advancement:?

Innovation:?

The Global Innovation Index (GII) went from a rank of 81 in 2015 to 40 in 2023. NITI Aayog ensures the optimization of the national efforts for bringing policy-led innovation in different areas such as electric vehicles, biotechnology, nanotechnology, space, alternative energy sources, etc. Including the list of innovations requires exhaustive research, if requested I will write another article on that?

Digitalization:?

Union Minister of State for Agriculture and Farmers Welfare, Shri Kailash Choudhary Launches AI Chatbot for PM-KISAN Scheme, Use of UPI also seemed to increase?

Development:?

The Chandrayaan 3 and Aditya L1 mission was a big win for India, it is set to launch its first X-Ray Polarimeter Satellite (XPoSat), NASA-ISRO Synthetic Aperture Radar (NISAR) mission, a collaborative effort between NASA and ISRO, is on track for its scheduled launch in the first quarter of 2024, National Quantum Mission (NQM) approved, Prototype Fast Breeder Reactor (PFBR), the 500 MW plutonium-powered one-of-a-kind reactor by India, is expected to become operational at Kalpakkam


7. Cultural and Demographic Factors:?

Cultural Dynamism: India's creative economy is now a $30 billion industry and creative exports were up 20% last year, generating over $11 billion

Demographic Trends: India became the most populous country in the world with a median age being 28.2 years

While most of the research on development is done with a biased mindset that it was India's Strong year, it is likely to take note of how it does support the exact statement. There might be things overlooked and every suggestion is welcomed.

References:

https://www.forbesindia.com/article/explainers/gdp-india/85337/1

https://www.india-briefing.com/news/dpiit-industry-and-trade-promotion-body-india-releases-positive-year-end-report-for-2023-30668.html/ https://economictimes.indiatimes.com/markets/stocks/news/at-174663-cr-d-street-records-highest-foreign-inflows-in-2023/articleshow/106392088.cms

https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1977061

https://www.india-briefing.com/news/india-skill-report-2023-findings-on-talent-availability-and-employability-in-emerging-technologies-29148.html/

https://dge.gov.in/dge/sites/default/files/2023-05/Employment_and_Unemployment_scenario_of_India_May_2023.pdf

https://www.ilo.org/wcmsp5/groups/public/---asia/---ro-bangkok/---sro-new_delhi/documents/publication/wcms_873755.pdf

https://www.startupindia.gov.in/content/sih/en/government-schemes.html

https://asiatimes.com/2023/12/boosting-employment-growth-in-india/

https://abdm.gov.in:8081/uploads/Digital_Health_Digest_November_2023_ddacbe2489.pdf https://www.aninews.in/news/business/business/spreading-the-financial-literacy-wave-across-india-national-finance-olympiad-202320231221152909/

https://pib.gov.in/PressReleasePage.aspx?PRID=1911807

https://pib.gov.in/PressReleasePage.aspx?PRID=1959461

https://pib.gov.in/PressReleseDetailm.aspx?PRID=1991892

https://economictimes.indiatimes.com/industry/banking/finance/banking/political-stability-keeping-india-ahead-in-an-uncertain-global-scene-hdfcs-deepak-parekh/articleshow/99689854.cms

https://accesspartnership.com/the-key-policy-frameworks-governing-ai-in-india/

https://www.ibef.org/industry/infrastructure-sector-india

https://www.investindia.gov.in/team-india-blogs/infrastructure-development-india

https://www.blackridgeresearch.com/blog/ongoing-mega-infrastructure-projects-in-india

https://www.thehindu.com/news/national/india-infrastructure-report-2023-delves-into-digital-transformation-public-private-partnerships/article67608153.ece

https://www2.deloitte.com/xe/en/insights/economy/asia-pacific/india-economic-outlook.html

https://niti.gov.in/sites/default/files/2023-06/Best-Practices.pdf

https://www.worldbank.org/en/country/india/brief/world-water-day-2022-how-india-is-addressing-its-water-needs

https://www.visionofhumanity.org/could-2023-be-indias-year-at-the-global-top-table/

https://pib.gov.in/PressReleasePage.aspx?PRID=1961576

https://www.ndtv.com/science/2023-recap-dramatic-changes-in-indias-science-tech-ecosystem-but-promise-of-a-brighter-future-4714706

https://www.drishtiias.com/daily-updates/daily-news-editorials/creative-economy-opportunities-and-challenges/print_manually

https://timesofindia.indiatimes.com/business/india-business/indias-creative-economy-is-now-a-30-billion-industry/articleshow/105107959.cms?from=mdr

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