New Delhi: India, over the past decade, has witnessed a remarkable transformation across various economic indicators, reflecting its emergence as a global economic powerhouse. From significant advancements in infrastructure to exponential growth in technology and innovation, the country’s journey towards prosperity has been nothing short of extraordinary.
In terms of economic magnitude, India leapt from the 10th position in the global GDP ranking in 2014 to an impressive 5th position by 2022, underscoring its growing influence on the world stage. This ascent is further underscored by the cumulative Foreign Direct Investment (FDI) inflows, which surged from $304.03 billion (2004-14) to a provisional $642.21 billion (2014-24), reflecting increased confidence among international investors in India’s economic potential.
One of the key drivers of India’s economic resurgence has been the favourable tax regime, with the effective tax rate for individuals with incomes up to ₹15 lakhs plummeting from 19.22% in 2013 to a mere 10.4% in 2022, fostering a conducive environment for entrepreneurship and wealth creation.
The rise in individual incomes, as evidenced by the weighted mean income as per Income Tax Return (ITR) data, saw a substantial increase from ₹3.1 lakhs (FY 2013-14) to ₹11.6 lakhs (FY 2021-22), reflecting enhanced purchasing power and improved standards of living.
Moreover, efforts to address income inequality have borne fruit, with the Gini coefficient, a measure of inequality, declining from 0.472 (FY 2013-14) to 0.402 (FY 2021-22), indicating a more equitable distribution of wealth.
India’s fiscal discipline is evident in the increase in direct tax collections as a percentage of GDP, rising from 5.62% (FY 2013-14) to 6.11% (FY 2022-23), reflecting prudent fiscal management and resource mobilization.
The burgeoning economy is also reflected in the surge in the number of Income Tax Returns (ITRs) filed, soaring from 3.79 crores in 2013-14 to 7.78 crores in 2022-23, indicating the expanding tax base and formalization of the economy.
The nation’s fight against inflation has yielded results, with the Consumer Price Index (CPI) inflation rate declining from 10.08% in 2013 to 5.65% in 2023 (till November), providing relief to consumers and ensuring price stability.
The concerted efforts to alleviate poverty have been successful, with the poverty headcount ratio plummeting from 29.17% in 2013-14 to 11.28% in 2022-23, and a relative reduction of poverty, as per the UNDP, showcasing a remarkable decline from 8.1% between FY06 to FY16 to 11.9% between FY16 to FY21.
Infrastructure development has been a priority, with substantial investments in sectors such as transportation and logistics. The expansion of airports from 74 in 2014 to 148 in 2023, the increase in highway length from 91,287 km in 2014 to 1,46,145 km in 2023, and the development of waterways from 5 in 2014 to 111 in 2023 signify the government’s commitment to bolstering connectivity and trade facilitation.
Innovation and technological advancement have propelled India onto the global stage, with significant improvements in indices such as the Logistics Performance Index (World Bank), Global Competitiveness (World Economic Forum), and the Global Innovation Index, showcasing India’s prowess in fostering an innovation-driven economy.
The digital revolution has also played a pivotal role, with exponential growth in internet penetration from 30.2 crore users in 2015 to 88 crore users in 2023, and a drastic reduction in mobile data tariffs from ₹269/GB in 2014 to ₹10.1/GB in 2023, making digital services accessible to a wider population.
Moreover, the proliferation of start-ups and the emergence of unicorns have reshaped India’s entrepreneurial landscape, with the number of start-ups skyrocketing from 350 before 2014 to over 1 lakh in December 2023, and the establishment of 189 space start-ups and 6,756 biotech start-ups, showcasing the vibrancy of India’s innovation ecosystem.
With steadfast reforms, strategic investments, and a burgeoning entrepreneurial spirit, India is poised to emerge as a global economic powerhouse, driving inclusive and sustainable growth in the years to come.