Until last year, nothing seemed right for the Indian economy. It was saddled with high inflation, low growth, twin deficits, and worst of all, an air of hopelessness. Huge corruption, slowdown in the global economy, weak demand, and lack of business confidence hung like a shadow over the Indian economy. The biggest foreign funds were avoiding India until a few months back as the growth prospects seemed limited.
We have a come a long way since then. We have broken the jinx of less than 5% GDP growth that was stuck with us for nine quarters. The market sentiments have turned positive, as one can see from the returns the stock markets have offered this year. Be it consumer demand or business confidence index, all are showing signs of improvement, and the promise of a higher growth period ahead.
The biggest catalyst in this turn around of sentiments has been the rise of the Modi Government to power as pro reform and pro growth, it is a breath of fresh air. While it is too early to judge, so far it has made the right noises. And the timing for this change could not have been better. The declining commodity prices for a net commodity importer like India is giving huge tailwind to this positive change.
Among all emerging markets, India is one of the most attractive now. The country's sovereign rating has been upgraded. It now enjoys confidence of the global fund managers who have significant exposure to India. In short, the external and internal factors lend huge support to growth story. With its huge demographic dividend and reforms expected to be implemented soon, we believe India has got the right ingredients for a good future ahead. And with the political will and an active central bank focused on taming inflation, India is likely to continue on the path of recovery.