As per IMF, India will become a $2-trillion economy in 2014 and to cross the $3-trillion threshold in 2019, becoming the world’s seventh largest economy in nominal terms. In purchasing power parity terms,, India is already the fourth largest economy in the world. According to OECD, India’s economy is likely to grow 6.4% next year; may be a hair’s breadth away from China by 2016. The IMF projected in its October 2014 World Economic Outlook report that the Indian economy would accelerate from a 5.6% pace in 2014 to 6.4% in 2015.In contrast, China’s growth is projected to moderate, from 7.4% in 2014 to 7.1% in 2015, as decelerating credit growth slows investment and real estate activity continues to ease. While China continues to grow at a faster pace than India, the performance differential is shrinking, and for the first time in years, the growth trajectories are moving in opposite directions. China’s economy remains export-driven, with consumers accounting for only 38 percent of gross domestic product, far below the levels of many developing and developed countries, such as India.
Overall medium to long-term outlook is very positive for India, It will be interesting to see how Indian Economy will sustain Economic Growth Pace while keeping the Inflation under control. Current drop in Crude Oil Prices will give a relief to the economy and will drastically reduce the Current Account Deficit difference. Although the Benchmark index is trading at it’s life time high, We are still bullish on the Indian Economy.