new economy

　　

At the end of 2016, when Forbes magazine published a report showing that India’s GDP has surpassed that of the United Kingdom, the Indian media announced in a proud tone: “This is the first time in 150 years that the Indian economy has surpassed the colonial British sovereign state.”

India's GDP ranks fifth in the world

According to a report by The Times of India on December 20, 2016, Kiren Rijiju, the Minister of State for the Interior Ministry of India, tweeted on his personal Twitter that day, India has surpassed the United Kingdom and has become a successor to the United States, China, Japan, and the United States. After Germany, the country ranks 5th in the world in terms of GDP. Killen said that although India has a large population base, it is still a huge improvement. Previously, the British Think Tank Centre for Economics and Business (CEBR) released data in December 2011 that India’s GDP will surpass that of the UK until 2020.

"Thanks to the rapid growth of the Indian economy over the past 25 years and the nearly 20% depreciation of the pound sterling in the past 12 months, this milestone has come ahead of schedule." The Times of India said that this data will reach 2020. , Will continue to expand.

Since taking office in May 2014, the Modi government has initiated a series of eye-catching political and economic projects, including policies such as "Made in India", "Clean India", and "Digital India", and vowed to improve the business environment and attract foreign capital . In addition, Modi used frequent diplomatic visits to the United States, Japan, Australia, China, Africa and other places to seek economic and trade cooperation, promote investment agreements, and vigorously promote India among the heads of state. This series of measures has also been given " The exclusive title of Modi Economics.

Just in December 2016, Sunil Barnwal, Chief Secretary of the Government of Jharkhand State, an inland province of India, led a delegation to visit Shanghai. He told The Paper that in order to attract foreign investment, Jharkhand had cancelled the private sector in September 2016. Capital and foreign capital's restrictions on mining mineral resources. Under certain conditions, a subsidy of 5,000 rupees per person per month will also be provided to factory workers who come to the state to invest in setting up factories to produce textiles for a period of up to 7 years. The amount of this subsidy has exceeded half of the monthly wages of Indian textile workers. In the past six months, at least one Indian delegation has come to China’s Yangtze River Delta region for investment promotion roadshows every month.

Lack of confidence in Indian investment

　　 However, investors generally lack confidence in India’s lengthy administrative procedures, legal risks and corruption issues.

"India's planning is too optimistic, its market opening is poor, its labor quality is not high, its infrastructure is backward, and it has not been integrated into the global production network. It is not easy to achieve such rapid economic growth." Xiamen University International Relations Wang Qin, deputy dean of the college, told The Paper.

　　 The Economist believes that if India wants to become a leader in the global economy, it "must solve the policy legacy issues that are not conducive to the development of productivity."

　　 In fact, Modi has led the People’s Party to carry out a series of reform attempts: relaxing foreign direct investment restrictions, implementing tax reforms, revising laws and regulations on labor and land acquisition, vigorously developing manufacturing, railways, and smart cities. At the beginning of 2015, Modi also announced the cancellation of the 65-year-old planning committee and the establishment of a new institution-the National Institute of Reform India (NITI).

　　 However, the "abolition policy" announced by the Modi government in November 2016 has once again cast a pessimistic color on the economic development of this South Asian country.

　　 On November 8th last year, Modi announced in a national television speech that in order to combat corruption and black money transactions, the two old high-density currencies of 500 rupees and 1,000 rupees currently circulating on the market should be abolished. This means that 86% of all Indian banknotes will no longer be legal tender.

　　 This policy has not only attracted complaints and criticism from the lower-level personnel, but some former Indian senior officials and economic analysts are also criticizing Modi's measures to "abolish money."

　 On November 24, 2016, Manmohan Singh, the former prime minister of India, stated that this was an “organized and legalized robbery” of the country. Singh said that Modi's policy is a "milestone mistake" that will wipe out India's economic growth rate by at least 2 percentage points. "Policies that have been implemented will make people lose confidence in the currency and financial system..."

　　 India’s “Boundary Capital” predicts that India’s GDP in the 2016-2017 fiscal year may fall by 4.1 percentage points. Fitch Ratings also adjusted the rating of India’s financial industry to negative in 2017, believing that the “money scrapping movement” hinders the normal operation of economic activities.

　　 However, such predictions may be too early. When calculating GDP data, the Central Bureau of Statistics of India switched the base year from 2004-2005 to 2011-2012. As a result, the GDP growth rate for 2013-2014 was revised up from 4.7% to 6.9%. According to the economic target set by the Indian government in February 2015, India’s GDP growth rate should be maintained at a growth level of 9%-10% in the next ten years.