Growth lessons India can take from new frontrunner Bangladesh -Jayanta Roy Chowdhury
-The New Indian Express
What changed the terms over the last few years from when India was the toast for global business and Bangladesh was an also ran?
NEW DELHI: India has not only lost its tag as the fastest growing economy, it is even lagging behind its former 'poor cousin’ Bangladesh, which grew by 8.1 per cent last financial year as against India’s 6.8 per cent. Similarly, while India’s growth forecast for the current fiscal has been slashed to just 6.1 per cent, Bangladesh is forecast to grow at a spanking 8.3 per cent pace.
The neighbouring nation, whose Prime Minister is visiting Delhi looking for support in a number of fields, is quite right in boasting of its success story – its per capita income has risen from a lowly $543 in 2006 to $2,000 in 2019. Its exports have similarly tripled in the last 12 years to $40.53 bilion and its foreign currency reserve has boomed to $33 billion. Hard facts that have seen Asian Development Bank (ADB) rating it as the fastest growing nation in the Asia-Pacific.
Bangladesh’s Prime Minister Sheikh Hasina reminded an audience of Indian captains of industry on Friday that her country “is the second-largest garment exporter, fourth largest rice producer and the eighth largest remittance earning country.”
What changed the terms over the last few years from when India was the toast for global business and Bangladesh was an also ran? In the last three years, India went in for a massive demonetisation exercise, which stifled its informal sector and slashed growth and soon after followed this up by introducing a new, hastily designed Goods and Services Tax which did not help grow the economy either. After recovering somewhat from these twin deleterious economic events, India was hit again by the aftershocks of a slowing global economy and shrinking of demand from over-cautious retail consumers.
India’s GDP growth chart during the period looks like a series of hills and dales as economy starts slowing down after November 2016 demonetisation and then starts recovering as the effects of the GST introduction are addressed and then again starts slowing down after April 2018.
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