Global credit rating agency Moody’s has maintained India’s credit rating amid the global economic crisis due to booming economic activities in various sectors (services, industry and agriculture). According to Moody’s, the quality of the Indian banking system will further improve.
Traditionally, the service sector has contributed the most to the Indian economy and the largest number of new employment opportunities have also been created in the service sector. In this view, after the Corona pandemic, there has been very good news recently that the service sector has once again emerged as a strong base in the growth of the Indian economy. During the Corona Pandemic period, the service sector was the most affected and most employment opportunities were affected in this sector. But, now the country’s Purchasing Managers Index (PMI) rose to 57.2 points in August 2022 from 55.5 points in July 2022 due to rapid improvement in the services sector. Employment in India has also grown at the fastest pace in the last 14 years due to improvements in economic activity, particularly in the service sector.
The service sector also includes various other activities such as trade, hotel and restaurant related activities, transport, warehousing and communication etc. Although economic activities are also improving in the industrial sector and agricultural sector, the Indian economy today has become the fifth largest economy in the world due to the boom in the services sector. India has now become the world’s fifth largest economy, dethroning Britain as the world’s fifth largest economy. Now only America, China, Japan and Germany are ahead of India. It is predicted that before the year 2030, India could become the third largest economy in the world after the US and China.
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Due to the continuous rapid growth in the Indian economy, the unemployment rate in the country has also started to decrease. The Indian economy has achieved a growth rate of 13.5 percent in the April-June 2022 quarter. While during this period the GDP growth rate of other major economies of the world such as China has been 0.4 percent, Spain 1.1 percent, Italy 1.0 percent, France 0.5 percent, Germany 0.1 percent, Britain -0.10 percent and America – 0.6 percent. . A report released by the National Statistical Office (NSO) said that the urban unemployment rate in India declined to 7.6 percent in the April-June 2022 quarter from 8.2 percent in the January-March 2022 quarter. -June 2021 quarter. It was 12.7 percent in the year and 8.9 percent in the April-June 2020 quarter. In this report it is also said that the country’s economy is coming out of the grip of corona epidemic and employment is gaining momentum once again.
Apart from the above report, the ‘staffing’ industry, which provides employment to people in various sectors of the country, has also made a big claim about employment opportunities in India. The ‘staffing’ industry has added 12.6 lakh workers in 2021-22. Out of which the participation of women in temporary jobs is 27 percent. Most jobs are created in the form of delivery services. In which the share of total workers has been 40 percent. According to the Indian Staffing Federation (ISF), the demand for temporary or fixed-term employees increased by only 3.6 percent in the financial year 2020-21. Workers in sectors such as consumer goods companies, e-commerce and manufacturing have gained more employment.
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Apart from the service sector, the central government is now paying special attention to the industrial sector, especially the textile industry, as this sector has huge potential to create new employment opportunities. To promote the textile industry in India, the central government is going to set up 75 textile hubs in different parts of the country. This will create crores of new employment opportunities for the youth of the country. At present, only Tirupur in Tamil Nadu is considered as the major textile hub of India. More than 10,000 garment manufacturing units are operating in this hub and more than 6 lakh employees are employed in these units. The size of this industry across the country is Rs. 10 lakh crore and textile exports from the country are Rs. 3.5 lakh crores. The central government plans to export textiles worth 10 lakh crores from the textile hub in the next 5 years and take the size of the industry to 20 lakh crore rupees. In the financial year 2021-22, textile and apparel exports from India have grown by 41 percent to US$ 4,440 million, the highest in any financial year so far. Considering the growth and employment potential in the textile industry, the Central Government has recently approved 61 applications from various companies under the Production Based Incentive (PLI) scheme for the textile sector. Along with this, new investment of more than 19,000 crore rupees is going to be made in this sector. Due to which in this sector Rs. 184,917 crore new business will be created and around 2.50 lakh new employment opportunities will be created. Exports of India’s fast growing textile industry are expected to reach US$ 10 billion by 2030. In this regard, India is likely to benefit greatly from the recently concluded free trade agreements, particularly with the United Arab Emirates (UAE) and Australia. Similar agreements are being made with the European Union, Canada, the UK and the US.
Global credit rating agency Moody’s has maintained India’s credit rating amid the global economic crisis due to booming economic activities in various sectors (services, industry and agriculture). According to Moody’s, the quality of the Indian banking system will improve further as the Indian economy is now recovering from the pandemic. India’s stable growth outlook indicates that financial risks in India are now easing. Indian banks have adequate capital buffer, liquidity position in Indian banks is also satisfactory and financial risk for banks and non-banking institutions in India is very low. Moody’s has also said that the ongoing global economic crisis will not affect India’s economy and the chances of a recession in India are almost zero.
India has now become a world leader in modern banking, with rapid and sustained improvements in the services sector and the industrial sector, particularly the textile industry. Countries like the US and China are also lagging behind in digital transactions with India. In the current financial year 2022-23, digital transactions worth Rs 566 lakh crore have taken place in India so far. Today Indian digital banking system is considered to be the most developed in the entire world and not only developing countries but also developed countries are trying to implement Indian digital banking system in their countries. Today around 284 crore digital transactions are taking place in India every day.
Exports of goods and services from India are likely to grow rapidly due to continued growth in the above sectors and continued decline in China’s economic growth and free trade agreements signed by India with many countries. The possibilities are growing. Due to which it is now believed that India is moving towards achieving an economic growth rate of 10 percent annually.
– Prahlad Sabnani
Retired Deputy General Manager
State Bank of India