Economic Growth of India: 1991 to 2016
The Route Traveled
On July 24, 2016, India celebrated the 25th anniversary of its liberalized economic reforms initiated in 1991. These reformed have spurred the growth of the private sector and thereby the economy. According to an article in The Hindu, published in June 2016, the GDP of the country has increased up to 20 percentage points in the 25 years since the iconic 1991 budget.
As part of the economic reforms, the Reserve Bank of India allowed private sector banks to be a part of the banking sector of India in 1993. This was a huge move in terms of economic growth, with experts calling it “unclogging the bottle necked highways of the financial sector.” This move initiated competition in the banking sector, with the customer being more focused on the bank than ever before.
To keep themselves alive, public sector banks also started improving their services, thereby again being beneficial for the customer. In these 25 years, the Indian financial sector has grown from infancy to an economy that is no longer protected by the cocoon of government policies and is able to survive on its own in the global market. In terms of growth, at a rate of 6.8% during 1991-2016, it is only second to China at 9.8%, in terms of rapidity of expansion. In 2016, India is now the third largest economy in Asia, behind China and Japan.
The Way Forward
India's economy grew by 7.2% in 2015, accounting for over 70% of the total GDP of South Asia. According to reports in the Hindu Business Line, the Indian economy is projected to grow at 7.3% in 2016. It also estimates that India will achieve 7.5% GDP growth in 2017. On the other hand, China, which is a much larger economy, is experiencing a slowdown, growing at 6.4% in 2016, recovering only 0.1% in 2017 to reach 6.5%.
A report by the United Nations said, “India’s economy is slowly gaining momentum, with an expected GDP growth of 7.3 and 7.5 per cent in 2016 and 2017, respectively. Despite some delays in domestic policy reforms and enduring facilities in the banking system, investment demand is supported by the monetary easing cycle, rising FDI, and government efforts towards infrastructure investments and public-private partnerships.”
With government policies opening the Indian market further for foreign investors, the economy will definitely get a push to grow even further.
Investment on a Personal Level
With the nation's economy more open to investments for the growth and financial security of the masses, it is also the duty of every individual to invest wisely for their families and their own personal future, say experts at Life Insurance Companies. A Unit Linked Insurance Plan or ULIP is a perfect investment choice to safeguard your future. It will not just help you achieve your dreams but will also give the essential cover for your family in case of any eventuality. Investing in a ULIP plan is also beneficial since it offers tax benefits for the investor under Section 80C of the Income Tax Act. This way, the individual can save enough for the future without having to sacrifice on day to day expenses.
ULIPs also secure one’s family by taking care of loans or financial burdens that the family might have to face in case of the untimely demise of the primary breadwinner. Investing in such plans keeps you at par with the nation’s growth. These plans are also ideal to avail the benefits of market growth in general. Considering the rate at which the Indian markets and economy are growing, ULIP plans are ideal for long or short term investments to reap the best out of the market, while also gaining through tax benefits.