Poverty and corruption is still rampant in India, but the world’s largest democracy is poised to rise to superpower status.A year ago, India’s future looked bleak. Anemic economic growth, inflationary fears, and a lack of credible leadership in New Delhi had fostered uncertainty and pessimism. That changed dramatically when Narendra Modi became Prime Minister on the promise of reforming India’s government and jumpstarting its floundering economy.
There are challenges, of course. The reforms that Modi has initiated are still in early stages. Political, cultural, and macroeconomic factors could slow down or derail progress; government corruption could be harder to eradicate than imagined, and oversized economic ambitions could crash against the hard reality of poor infrastructure and widespread poverty. At the same time, rising tension with its nuclear neighbor Pakistan and the growing China could require India to spend heavily on defense, create internal strife between Hindus and Muslims, and distract from other priorities.
Even though GDP growth in the third quarter of 2014 slowed slightly from the summer it was still much higher than that of the last several years. India’s $1.9 trillion economy is projected to expand by this year, according to the International Monetary Fund, and the country has already outpaced Japan as the world’s in terms of purchasing price parity, a measure that adjusts for price differences between economies, according to the World Bank.