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India has emerged as the biggest story of the year with the Narendra Modi government delivering a stunning turnaround in its economic fortunes.
The Prime Minister’s victory was a vindication of his ambitious economic agenda and his belief that the country was in good shape to overcome the challenges of a globalised world.
The country has emerged from the recession as the world’s third-largest economy and the biggest recipient of foreign aid.
Its growth in real terms slowed from 3.9 per cent in 2015-16 to 2.7 per cent last year.
The government’s own numbers show that its gross domestic product fell by 0.2 per cent this year.
But the PM’s victory on Tuesday also highlighted the importance of the economy, which accounts for over 60 per cent of the country’s gross domestic products.
India has become the fastest-growing major economy in Asia and the fastest in sub-Saharan Africa, according to the World Bank, and its growth rate has been among the fastest since its independence from Britain in 1947.
But its economy has been hit by the global economic slowdown and the impact of a series of government interventions in the private sector, such as demonetisation, that have hurt economic growth.
A huge chunk of the rupee’s value has been wiped off the value of the Indian rupee since the start of the demonetization drive in November last year, but the impact has been far from complete.
The economy has had to find a new way to pay for public services and the poor have suffered.
The slowdown in the economy has also hurt the poor, with the country having the highest poverty rate among the top-five economies in the world.
“The biggest thing is that people feel that the economy is on the right track,” said Rajesh Naidu, a business professor at Jawaharlal Nehru University.
“It is a major victory.”
The PM, who has pledged to end the high unemployment rate, has also sought to boost investment and the rupees rate has appreciated sharply since demonetised.
“It is the biggest news of the whole year.
We have taken an important step in the direction of the economic growth,” Mr Modi said in his victory speech in New Delhi.”
There are some big challenges ahead, but we have been able to turn the page,” he added.
The PM has said he is committed to the economy and he has promised to help the poor.
India is one of the fastest growing economies in Asia, and the PM has sought to address many of the concerns that have led to the decline of the world economy.
Mr Modi has vowed to improve the countrys infrastructure and modernise its public services, which he says are in urgent need of modernisation.
India had to deal with the impact from the global financial crisis in the past decade, but its growth has slowed sharply after demonetisations, and growth is forecast to be just 0.1 per cent next year.
Mr Modi has been criticised for a lack of infrastructure investment and his government has promised a new wave of investment.
He has also promised to provide jobs to more than 10 million people, but most of the jobs are in rural areas, where people are struggling to make ends meet.