Is India’s economic revival thanks to the Modi government?
In May 2015, the IMF highlighted India as “one of the bright spots in the global economy”, mainly due to more effective policies and the end of political uncertainty. Coface expects the country’s GDP growth to reach 7.5%. But to what extent have Modi’s reforms contributed to the recent pickup in growth? Are the improvements in the economy without risks?
In May 2014, following 5 weeks of legislative elections, India’s Bharatiya Janata Party (BJP) leader – Narendra Modi – became Prime Minister. Elected without the need for allies, this is the country’s first non-coalition government for 25 years. Known to be pro-business, Mr Modi’s election has instilled hopes for reforms in a country where bureaucratic impediments and poor infrastructure have been constraining private and public investments for years. After only one year in power, the Modi administration has already initiated major measures - such as the Goods and Services Tax bill which is expected to boost growth and fiscal revenues, as well as the increases in the foreign direct investment ceiling in several sectors.
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