Long-term economic outlook upbeat for India as it turns 72

AS India celebrated its 72nd Independence Day on Wednesday, the economic news coming out of the country remained a mixed bag. While structural reforms have strengthened the economy, several critical weaknesses still persist.

In his traditional address to the nation, his last before elections are due by May next year, Prime Minister Narendra Modi pointed out that India's economic clout was growing, with the country replacing France as the world's sixth largest economy, in US dollar terms, with a nominal gross domestic product (GDP) of US$2.6 trillion. By the end of this year, India is expected to overtake Britain as the world's fifth largest economy. In purchasing power parity (PPP), India is already the world's third largest economy.

With a 7.4 per cent growth in the first quarter of fiscal 2019, which ended on June 30, the country seems to have recovered its growth momentum. Describing India as "an elephant starting to run", the International Monetary Fund (IMF) has forecast a 7.3 per cent GDP growth for the fiscal year ending March 2019. IMF noted that India has benefited from "good macroeconomic policies" over the past few years.