India’s G20 Sherpa and former NITI Aayog CEO, Amitabh Kant, has clarified India’s classification as a developing nation despite being among the top five economies globally. He explained that a developing country is one with a Gross National Income per capita of $11,905 or less, and countries like China, Brazil, and Malaysia also fall under this category.
India’s business activity has reached its highest level in nearly 14 years, driven by robust demand and easing input inflation. The positive job growth positions India as the fastest-growing major economy in 2022. The flash India Composite Purchasing Managers’ Index (PMI) surged to 62.2 in April, led by strong performance in manufacturing and service sectors.
India’s financial system has undergone a remarkable transformation in recent years, moving from a position of fragility to one of comparative strength. Reforms initiated in 2013 have addressed systemic issues, stabilized the financial landscape, and fueled growth in key sectors. The country’s healthier financial system has enabled greater access to credit, boosted savings, and supported the expansion of capital markets. Despite some challenges, India’s financial sector is well-positioned for continued growth and development, attracting global recognition and investment.
India’s economy faces significant challenges related to income inequality, lack of demand, insufficient workforce, and regional disparities. To address these deficiencies, the government has implemented various welfare programs and is pursuing trade agreements and subsidies to boost exports. However, sustainable economic growth requires reforms in labor and land regulations, investment in infrastructure and education, and measures to increase female labor force participation.
