Is India is suited in to Sri Lanka

India is the largest democratical and socialist nation with a population of 130 million. India has developed a lot since its Independence from depending on others to being a self-made Atmanirbhar.

In India, industrialization has been possible because India adopted a mixed economy policy to balance the growth in all sectors. today India is a growing economy and is recognized by every country whereas a future economic power in the world over the next 10-15 years.

India's nominal GDP at the current price is estimated to be 236.65 trillion which means 3.05 trillion dollars in 2022. India to witness GDP growth of 8.0-8.5% in 2022-23. GST is the major tax reform that furthered the ease of doing business and fulfilled the vision of “ONE NATION ONE TAX”. Collection of GST hit an all-time high in 2022 at 1.68 billion(April) 20% increase. 

Foreign exchange reserves stood at US$ 634.28 billion as of 31st Dec 2021 India’s exports of both goods and services have been exceptionally strong so far in 2021-22. Merchandise exports have been above US$30 billion for eight consecutive months in 2021-22, despite many pandemic-related global supply constraints. Net services exports have also risen sharply, driven by professional and management consulting services, audiovisual and related services, freight transport services, telecommunications, computer and information services. From a demand perspective, India’s total exports are expected to grow by 16.5 %in 2021-22 surpassing pre-pandemic levels. Imports also recovered strongly with the revival of domestic demand and a continuous rise in the price of imported crude and metals. Imports are expected to grow by 29.4 %in 2021-22 surpassing corresponding pre-pandemic levels. Resultantly, India’s net exports have turned negative in the first half of 2021-22, compared to a surplus in the corresponding period of 2020-21. But current account deficit is expected to remain within manageable limits.

       

Sri Lanka, an island country formerly known as “Ceylon” and a democratic socialist republic of Sri Lanka of population 21.8 billion with a GDP of 321.86 billion in 2020 and Sri Lanka imports following 2021 to the values of 2022 are shown below in the data in the quarterly division. The values for 2022 are shown as per available Sri Lanka import data and intend to give a quick glimpse into the import trend of Sri Lanka for 2021 followed by 2022 till March. Sri Lanka’s exports amounted to $4.5 billion in the first quarter of 2021, followed by $2.9 billion in the second quarter, and $3.5 billion in the third quarter. The final quarter of 2021 amounted to $4.2 billion. The first quarter of 2022 accounted for the lowest value among all at $2.4 billion.

The main reasons are:

Analysts say economic mismanagement by successive governments weakened Sri Lanka’s public finances.

The situation was exacerbated by deep tax cuts enacted by the Rajapaksa government soon after it took office in 2019.

Months later, the COVID-19 pandemic struck, wiping out much of Sri Lanka’s revenue base, mainly from tourism.

Remittances from nationals working abroad dropped, forcing the government to draw from foreign exchange reserves.

Fuel shortages led to long queues at filling stations as well as frequent blackouts, and hospitals ran short of medicine.

Runaway inflation reached 54.6 percent last month and could rise to 70 percent, the central bank said.

In April 2021, the president banned imports of chemical fertilizers, a move that decimated staple rice crops, driving prices higher.

Despite the rapidly deteriorating economic crisis, the Rajapaksa government initially held off talks with the IMF.

Sri Lanka eventually opened talks with the IMF.

So I think that India will not become as an SRI LANKA