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India among 10 rich countries but average Indian still quite poor, says Reuters's recent survey

India among 10 rich countries but average Indian still quite poor says Reuters s recent survey pardesi news 1466528977

India gathered a lot of momentum to hold its ranking as the world's fastest growing large economy in recent times. The recent Reuters's survey suggest India among 10 rich countries, however the average Indian is still quite poor.

India has been ranked among the 10 wealthiest countries globally with total individual wealth of $5,200 billion, but this is largely owing to its large population, a report said, adding that on a per capita basis, the average Indian is "quite poor".  According to the report by New World Wealth, India has been ranked seventh in the list of top 10 wealthiest countries in the world, which was topped by the United States with total individual wealth of $48,700 billion.  "India only makes the W10 (10 wealthiest) due to its large population. On a per capita basis, the average Indian is quite poor," the report said, adding that over the past 15 years the country grew "strongly". 

Reuter’s recent survey of economists expected data also shows that India's gross domestic product has grown 7.5% year-on-year between January and March, faster than the previous quarter's 7.3%. Importantly, India’s PM Modi had promised to revitalize Asia's third-largest economy and despite a dearth of private investment and shrinking exports, the  policies are having some success as cooling inflation and lower interest rates have boosted consumer demand,  

According to Finance Minister ArunJaitley, "This 7.5% growth, in a global slowdown environment, has a potential to pick up even more”. India's upbeat outlook contrasts with neighboring China, where growth slipped to 6.7 in the first quarter - the slowest posted by the world's second largest economy in seven years.

Moody's Investors Service said a recovery in private investment would be needed if India's upturn was going to last, given the dim prospects for a boost from exports. The rating agency's analysts wrote in a note that “Combined with the fact that external demand is likely to remain lackluster, a sustained improvement in domestic private investment would be required for the growth momentum to be sustained".

Moreover, the Reserve Bank of India (RBI) is also widely expected to keep its policy interest rate on hold at a scheduled policy review on June 7 as it waits for banks to fully pass on the previous the benefits of earlier cuts to borrowers. Consumers, particularly in urban areas, have been encouraged by the lower rates. Sales of passenger cars and two-wheelers are growing at a double-digit pace. Sales of new residential units recovered in the last quarter, snapping a falling trend. Personal loans that include loans for durable goods, housing and education are growing at a rate of 19% year-on-year, while credit card loans are growing at a 24% clip. With good rains forecast this summer, the farm sector is set to get a fillip after two successive years of drought. That bodes well for depressed rural demand. Forthcoming increase in wages and pensions of government employees are also expected to underpin consumer spending.

For India, the problems are immense ranging from the several external uncertainties, which are also on constant rise, including Chances of United States interest rates going up, Britain voting to leave the European Union, and China's economy worsening all pose risks for emerging markets such as India.   However, as part of Modi’s strategy to boost business and generate jobs, he has accelerated public spending on road construction, laying new power lines and upgrading the rail network. He has also lifted caps on foreign investments in sectors such as insurance and defense manufacturing. Festering bad loans have made several banks wary of fresh lending, forcing cash-strapped firms to keep a lid on capital outlays and, in any case, several factories are still running well below capacity.

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Patrick Callahan

Pardesi News Reporter

Pardesi News Reporter

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