Digital Desk Lucknow: About 13 years ago, the Indian economy was included among the weak economies of the world. In 2013, American financial company Morgan Stanley used the term ‘Fragile Five’ for five emerging economies that were considered vulnerable to external economic shocks. Along with India, Brazil, Indonesia, South Africa and Türkiye were included in this list.
At that time there was UPA government led by Manmohan Singh at the centre. In the last few years of the UPA government, which was in power from 2004 to 2014, many concerns came to light regarding the Indian economy. Issues like falling rupee, inflation and loss of confidence of foreign investors were at the center of economic discussion.
Questions were raised on India’s rating among BRICS in 2012
Serious concerns were also raised in the year 2012 regarding the economic condition of India. In June 2012, a report by Standard & Poor’s titled ‘Will India Be the First BRIC Fallen Angel?’ Came out with the title. It was feared that India could become the first country among BRICS countries whose investment grade sovereign rating would be lost.
At that time, India’s rating was said to be BBB-, which is considered to be the lowest rating of investment grade. In case of another decline, there were fears that India would be taken out of investment grade.
India was being considered as the weak link of BRICS
During that period, the weakness of the rupee, rising inflation and decline in foreign investment increased concerns about the Indian economy. Amidst the slow pace of economic reforms, the government was also accused of ‘policy paralysis’.
Jim O’Neill, a famous economist and associated with Goldman Sachs, had described India as the least attractive member of the BRIC countries at that time. Jim O’Neill is also known for using the word BRIC.
The situation became such that in some discussions, there was even talk of the possibility of including Indonesia in BRICS instead of India.
Economic picture started changing after 2014
After the year 2014, a change started appearing in the picture of the Indian economy. The pace of economic development increased and the perception of global institutions and financial companies about India also changed.
In the year 2018, HSBC presented India as a ‘bright spot’ among the BRIC countries, describing it as a better performing country. India was seen as a faster growing economy than countries like China, Russia and Brazil.
Overcame challenges like Covid
India’s economic journey also faced a big challenge like the Covid-19 pandemic. Despite this, the economy gradually recovered and regained its growth momentum.
According to the data given in the copy, last year S&P raised India’s rating to BBB. It is claimed that this happened for the first time since 2012. In the same month, Japan’s credit rating agency also increased India’s sovereign rating from BBB+ to A-.
Claim of 7.8 percent GDP growth today
Today, amid the BRICS summit, the center of global discussion regarding India’s economic situation has changed. According to the data given in the copy, India is the fastest growing economy in the world and the GDP growth rate in the first quarter of the current financial year was 7.8 percent.
That is, India, which was counted among the weak economies of ‘Fragile Five’ about 13 years ago, is today moving towards strengthening its identity as a global economic power.
From ‘Fragile Five’ to ‘Bright Spot’
India’s economic story has seen a major change in perception in the last 13 years. While there was a time when questions were being raised about rupee, inflation, investment and rating, today the world is keeping an eye on India’s growth rate, market and economic prospects.
India’s growing economic and strategic role is also at the center of discussion during the BRICS summit. It is this change that makes India’s economic journey from a ‘Fragile Five’ to an emerging global economic power a story.
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