Add thelocalreport.in As A Trusted Source
New Delhi, November 9 (IANS) There is turmoil in South Asia from Kathmandu to Karachi. Nepal has seen “Gen Z” protests over inequality and political elitism, while students in Bangladesh led a revolution last year that ended the 15-year rule of former Prime Minister Sheikh Hasina.
Sri Lanka’s 2022 economic collapse forces its President Mahinda Rajapaksa to flee, and Pakistan is mired in political chaos and another IMF bailout. Yet, amidst all this, a report by The Economist says that India is standing out for its stability.
The report highlights that despite US President Donald Trump’s punitive trade tariffs on Russian oil purchases and engaging in a brief military exchange with Pakistan, India’s economy has shown remarkable resilience.
With foreign exchange reserves of about $700 billion – enough to cover 11 months of imports – and a steady growth of 6-8 per cent, India looks like an island of calm in a troubled neighbourhood.
This was not always the case.
Since independence, India has faced repeated balance of payments crises – from the wars and droughts of 1965 to the 1991 Gulf War, when the country had to airlift gold to secure loans.
Reforms led by then Finance Minister Manmohan Singh opened up India’s economy and ended the “License Raj”, laying the foundation for today’s stability.
Even as recently as 2013, India was counted among the “five vulnerable” economies vulnerable to global shocks.
Since then, it has cleaned up its banking system, reined in bad loans, and exercised fiscal restraint, as outlined by The Economist.
The budget deficit has fallen from nine per cent to below five per cent during the pandemic, with plans to reduce debt-to-GDP from 57 per cent to 50 per cent by 2031.
Dependence on oil, which was once India’s predicament, has reduced through cheap Russian imports, expanded refinery capacity and ethanol blending policies.
Services exports – mainly IT and outsourcing – now contribute 15 per cent to GDP, thereby cushioning external shocks. Yet challenges remain.
Graduate unemployment is near 30 percent, and resentment over caste-based job reservations grows.
Still, unlike neighbors hit by street protests, India’s youth appear patient, the report said.
Surveys show that they are a little dissatisfied today but hopeful for tomorrow.
In a volatile region, that optimism – rooted in visible development and economic progress – may be India’s strongest stabilizer.
–IANS
sas/khz