The eyes of the world are on India and its economy. A new government has been formed in the country. This time this government is not like the two previous governments. No party has an absolute majority. Due to which the NDA government was formed under the leadership of the BJP. In such a situation, the foreign company believes that the new government will find it difficult to make the difficult decisions it was trying to make. The foreign firm has also predicted that if the government manages to accomplish those difficult tasks, then the pace of the country’s economy can increase. After all, what foreign company is that? What are those difficult tasks that the new government may find difficult to accomplish? Furthermore, if all those things are done, how much growth can the country achieve?
Then the economy will accelerate
Swiss brokerage firm UBS Securities said on Monday that it will be difficult for the new government, dependent on Prime Minister Narendra Modi’s allies, to implement tough reforms. UBS Securities said if the government is able to implement tough reforms such as land, agriculture, disinvestment, uniform civil code and one nation, one election, then the potential growth rate could be over 7.5 per cent. Tanvi Gupta Jain, chief India economist at UBS, said that by implementing tough reforms, the potential growth rate over the next five years could rise from the current 6.5-7 percent to more than 7.5 percent.
These tasks will be difficult
Referring to the reliance on National Democratic Alliance (NDA) allies in the third term of the Prime Minister Modi-led government, he said compared to the 2019 and 2014 elections, it will be difficult to push for drastic reforms this time. He said the government will focus on promoting manufacturing, implementing labor laws already passed and focusing on skills development in the next 12 to 18 months.
How much can GDP be?
Jain said we believe it will be a challenge to implement drastic reforms including land reforms, increased infrastructure spending, disinvestment, farm bill, uniform civil code, one nation, one election. He said the pace of growth is strong and the real GDP growth rate in the financial year 2024-25 may be seven per cent. Recently there was a monetary policy meeting of the RBI. In which RBI Governor Shaktikanta Das estimated the current financial year’s GDP at 7.2 per cent. Which is much lower than the pace seen in the financial year 2023-24. In the last financial year, the country’s growth was more than 8 per cent.
