India was recently declared to have the world’s fastest-growing large economy, with a growth rate of 7.6 percent.
Part of the reason behind India’s rapid growth is believed to be due to low oil prices. India is said to import about two-thirds of its oil.
As far as production is concerned, agriculture has been picking up compared to previous years. After two years of droughts, monsoons are expected to help those who work in farming or live in rural regions.
Recent interest rate cuts have also helped the economy, as people are spending more than in previous years.
With this being said, not all news is bright. April figures show that India’s rate of exports fell for the seventeenth consecutive month, which can lead to less manufacturing output and jobs.
India’s inability to achieve full output is illustrated in how Indian factories are operating at 30 percent below capacity, and investment has only been evident in a few sectors, mainly ones that government has pushed for or has been involved in.
The fact that industrial output is fairly weak has caused many to question the new methods for measurement used by India in terms of calculating its GDP. India’s new GDP figures have transformed its perception from being a stagnant nation to that of being an extremely thriving economy.
Even the Reserve Bank of India’s governor, Raghuram Rajan, has questioned the veracity of the new figures. He has questioned if double counting, where certain transactions are counted multiple times, was employed, whether intentional or accidental. This could easily create deceptive figures.