According to various reports, Indian economy has become the world’s fastest growing economy replacing China. The Indian economy in 2015 is expected to grow at 8.1 percent in the current financial year. A report by UN says that the growth of country is accelerated by its strong consumer spending pattern due to lower inflation and monetary easing, the new infrastructure projects and the reform measures taken by government on various issues. The decline in inflation rates is due to the lower global energy prices. Also the investments of people are expected to increase with a capacity utilization rate of 70 percent which adds up the growth. The International Monetary Fund (IMF) and the World Bank have projected India’s growth at 7.5 percent for the current fiscal year but the Reserve Bank of India (RBI) forecasts to growth at a rate of 7.8 percent. These growth projections are at par with the estimates of the Finance Ministry of the country.
The structural reforms of the country have gained an extra momentum since the new government took the administration of the country in May 2014. The major initiatives took by them includes opening up of new bank accounts for the entire 120 million population of the country for an easy access to financial services .It also announced to raise money for advancement through Foreign Direct Investment (FDI) in sectors such as defence, railways and construction. Another initiative by the government is “The ‘Make in India’ campaign which was launched in September 2014 to promote India as a global manufacturing hub and encourage companies to manufacture their products in India to support job creation and skill enhancement.
The success of the scheme requires broad-based policy actions to enhance human capital, to have an easy access on inputs and finance and a better connectivity with rest of the world. The government also introduced an online service platform for environmental and forest-related clearness and also to resolve harsh labour related issues. The report identifies that the main challenge which curtails the growth is to address the labour market rigidities and create jobs 8 million new job entrants every year .As more than half of the Indian population still depends on agriculture, the country needs to raise its productivity for its potential growth and create high savings for the emerging middle-class population to cut down poverty. Another challenge for the Indian Economy in 2015 is its poor infrastructure and more investments are required to meet the increasing demand of growing populations and their income to support rapid economic growth.