There are myriad problems that are persisting in the economy and are became has stumbling blocks for the development of the country. Though few are inherited from the previous government and new are added to this manifold by the incumbent government to put the economy on the right track but it crippled the economy so much. The major problem which attained the limelight is the NPA i.e Non-performing assets which are overhanging on bank’s balance sheets. This had crippled the growth of capital to GDP ratio so much that it reached the lowest ebb in the decade. The other policy measures by the incumbent government had made the situation miserable for the common men, small and medium scale sectors by implementing the Demonetization and GST in the economy. Both the measures have created immense ruckus in the economy and lead to terrible havoc.
The Government after completing 4 years of service in the office took the stock of the situation that was persisted in the economy where GDP pegged at low rate in the decade, sluggish in exports ,low generation of employment etc are rampant.
The Government came ahead to redress the situation that was lingering the economy and appointed Prime Minister, Economic Advisory Council under the able stewardship of Bibek Debroy to examine the situation and to recommend a slew of measures to invigorate the economy with rapid growth rate. The Government heeded to the recommendations of this body and pronounced a series of measures to boost the wheel of growth in the economy by announcing highest percentage of GDP to the infrastructure sector. This naturally leads to the generation of the employment and also improves the infrastructure sector meteorically. The Government on the other side is mulling seriously to ramp up the private investment in the economy by inducing the Recapitalization bonds to the Public sector banks which are overhanging with NPA’s .
The other feather in the cap of Government is by implementing the GST on 1ST July 2017, which is eulogized has biggest indirect ever tax reform in the independent India. This reform smoothens the multiplicity of the tax structure in the India by implementing 4 different tax slabs for the convenience of the people and keeping in view of the reform, the Government is intended to bring another reform in Direct Taxes and for this a committee was appointed under Narendra Modi, to bring transparency in Direct tax reforms.
The Government also simplified the FDI rules to attract more foreign investment into the country and this will immensely help to generate more employment in the economy. The international rating agencies such has Moody’s , S&P’s recognized the facts and measures taken by the Government of India to refresh the economy and redress their perception. Another feather in the cap of India is it was positioned at 100th place in Ease of doing business reported by the Bretton Wood institution. The other research credited about the India is that it will overtake UK and France in 2018 and establish itself has the largest economy in the world and place in top 5 countries. The positive euphoria in the economy is the steering the India in this world of Globalization.
India has to improve its infrastructure so that it can attract more foreign bigger companies in India is presently known as one of the most important players in the global economic landscape. Its trade policies, government reforms and inherent strengths in the economy have attributed to its standing as one of the most sought after destinations for foreign investments in the world. Also, the ‘Make in India’ initiative undertaken by the Government of India is likely to bring about positive economic reforms into the country as well as encourage more domestic investments in the next few years. We must remember if India’s economy is strong then the Indian Government has more space to man-oeuvre its economic diplomacy to its advantage.
India will grow as the second largest economy by 2050. At present, the country is categorized as an Emerging Market Economy (EME) along with China, Brazil, and Russia etc. Even in the current phase of the global economy, India’s macroeconomic performance is comparatively better.
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