ECONOMY of INDIA
We are in the 21st century where we are repeatedly being encountered with statements of eminent persons , like chief of IMF , Ms. Christine Lagard recently said that "Indian Economy has a very huge potential to grow in the coming years". Everyone sees India as a potential market due to our youth population as we have highest youth population in the whole world and this period is proudly referred as "Demographic dividend" era of india which according to various sources is from 2005-2055. But if we see "are we really getting benefit of this era as a country?" , this question has been repeatedly asked .
So, let's talk about first the economy in general then we will proceed to economy of India .
Basically, every economy has three stages of development , in each stage one particular sector develops and open opportunity to the other sector to develop.
1) In the first phase , generally the primary sector or the sector which provide raw things e.g., agriculture , mining etc. , to a country develops.
2) In second phase , the secondary sector or manufacturing sector develops.
3) In the third phase , the tertiary sector or service sector develops.
Now, if we compare this to India's economy , we get through first and third phase only and there was no second phase , due to which we became a consumer based economy instead of a manufacturing based economy.
India if we see , has a major drawback of getting its needs fulfilled through imports due to which our economy is more vulnerable to outer affects which we recently saw , as a rise in oil prices.
From all above we can conclude that we are not up in the position to use our true potential for our benefits and the aspiration which we have from our economy to be like that of china's , which is still a farsighted thing.
Now if we see, our economy has a very good service sector and it is the major driver of our economy today. But to get into the doble-digit GDP data we need to have the second phase in our economy as well , which can diversify our economy so that it will not rely solely on service sector.
To develop our manufacturing sector our current government has taken good initiatives like Make In India , Startup India and various others. but still the magic or boom which we want is missing , the possible reasons which I see for that are :-
1) stringent land and labour laws
2) High tax rates for corporate sector
3) Low rate of returning interest to attract foreign direct investments
4) Lack of infrastructure and skill among labours
And to add up to this problem or more burden to our economy , the unemployment is rising due to lack of skilled jobs in our country. All these things are contributing and adding up to make our economy more stressful.
So, what measures we can take which can make our economy , a booming one are:-
1) We are doing well to provide our youth good education and increasing the enrolement rate but if we see with unemployment , problem of underemployment is also prevelent , for that providing good formal sector jobs by reviving industries , attracting FDIs seem to be a possible option and to tackle unemployment , developing informal sector which accounts for 85% of India's employment is Needed.
2) As our economy is consumer based we have to make it driven by exports also and this can be done if government will spend more on infrastructure , making new industries and focusing on key sectors like Iron and steel , as well as potential sector like dairy sector.
3) MSME sector can provide us opportunity by using which we can have a boost in economy, for MSME sector we have to get rid of our current practice of land and labour laws , decreasing tax rates and encouraging enterpreneurial spirit is a must.
4) Problem of NPAs has become burden for us , so to solve that GOI's step of insolvency and bankruptcy code is commendable , but government have to sell its stakes in public sector banks and make them more privatised so that they become less vulnerable to problem of NPA. As banks plays a very important part in stabilising an economy so it became important to focus on them too.
5) And above all for a temproray relief, increasing the money in consumer's pocket mainly rural population by different Direct benefit transfer scheme, can provide relief to us.
In today's time India is the fastest growing economy and we surpassed France to become 6th biggest economy and now heading to surpass U.K. to become 5th in the whole world , so it becomes important to focus on economy but at the same time focusing on key problem like unemployment, poverty , food scarcity etc. is the need of the hour. India will not develop until it will eradicate major concerns in its economy and for doing that a political will binded with a good and robust planned strategy is needed.
So, let's talk about first the economy in general then we will proceed to economy of India .
Basically, every economy has three stages of development , in each stage one particular sector develops and open opportunity to the other sector to develop.
1) In the first phase , generally the primary sector or the sector which provide raw things e.g., agriculture , mining etc. , to a country develops.
2) In second phase , the secondary sector or manufacturing sector develops.
3) In the third phase , the tertiary sector or service sector develops.
Now, if we compare this to India's economy , we get through first and third phase only and there was no second phase , due to which we became a consumer based economy instead of a manufacturing based economy.
India if we see , has a major drawback of getting its needs fulfilled through imports due to which our economy is more vulnerable to outer affects which we recently saw , as a rise in oil prices.
From all above we can conclude that we are not up in the position to use our true potential for our benefits and the aspiration which we have from our economy to be like that of china's , which is still a farsighted thing.
Now if we see, our economy has a very good service sector and it is the major driver of our economy today. But to get into the doble-digit GDP data we need to have the second phase in our economy as well , which can diversify our economy so that it will not rely solely on service sector.
To develop our manufacturing sector our current government has taken good initiatives like Make In India , Startup India and various others. but still the magic or boom which we want is missing , the possible reasons which I see for that are :-
1) stringent land and labour laws
2) High tax rates for corporate sector
3) Low rate of returning interest to attract foreign direct investments
4) Lack of infrastructure and skill among labours
And to add up to this problem or more burden to our economy , the unemployment is rising due to lack of skilled jobs in our country. All these things are contributing and adding up to make our economy more stressful.
So, what measures we can take which can make our economy , a booming one are:-
1) We are doing well to provide our youth good education and increasing the enrolement rate but if we see with unemployment , problem of underemployment is also prevelent , for that providing good formal sector jobs by reviving industries , attracting FDIs seem to be a possible option and to tackle unemployment , developing informal sector which accounts for 85% of India's employment is Needed.
2) As our economy is consumer based we have to make it driven by exports also and this can be done if government will spend more on infrastructure , making new industries and focusing on key sectors like Iron and steel , as well as potential sector like dairy sector.
3) MSME sector can provide us opportunity by using which we can have a boost in economy, for MSME sector we have to get rid of our current practice of land and labour laws , decreasing tax rates and encouraging enterpreneurial spirit is a must.
4) Problem of NPAs has become burden for us , so to solve that GOI's step of insolvency and bankruptcy code is commendable , but government have to sell its stakes in public sector banks and make them more privatised so that they become less vulnerable to problem of NPA. As banks plays a very important part in stabilising an economy so it became important to focus on them too.
5) And above all for a temproray relief, increasing the money in consumer's pocket mainly rural population by different Direct benefit transfer scheme, can provide relief to us.
In today's time India is the fastest growing economy and we surpassed France to become 6th biggest economy and now heading to surpass U.K. to become 5th in the whole world , so it becomes important to focus on economy but at the same time focusing on key problem like unemployment, poverty , food scarcity etc. is the need of the hour. India will not develop until it will eradicate major concerns in its economy and for doing that a political will binded with a good and robust planned strategy is needed.
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