Indian Economy.. are we going the way to Hindu rate of growth..

Looks like we are getting into vicious circle of ailing economic growth, persistent high consumer inflation and increasing joblessness. Since the onset of global financial crisis in 2007-08, we are unable to stand on our feet. Though we recover once global economy stabilized at lower level, but during the last two years, due to policy paralysis, we are unable to convert adversity into opportunity.

 

First, government has failed miserably in augmenting supply to rein in consumer price inflation. India badly needs reform in agriculture, farm produce and distribution etc. This will benefit both farmers and consumers. It is high time that we should witness another green revolution to make ourselves self sufficient. This is all the more important now in the light of recently announced Food Security Bill to provide food to 80% of the population at abysmally lower prices. This will involve procurement and storing of various farm produce. This may further boost price rise. We already have very poor record of storage of grains. Can we do something to improve that at the outset..

 

In addition, due to the lack to reform, malpractices, fear in bureaucracy and uncertainty in India, domestic investors chose to invest outside the country. For example Tata chose to buy Corus and JLR. Aditya Birla has bought over Novelis. These are few illustrative example which indicates the mindset of promoters.  

 

In the middle of the 1990-2000, we were growing at the rate of 5%. Already, we are cloaking almost similar growth. There are reasons to believe, that we may witness same growth rate for considerable future as there are hardly any measures taken . In fact the worrisome fact is that neither government nor corporate world is recognizing this fact. In the absence of action plan, only way we can grow above Hindu rate of growth is to export our way on the back of recovery of global. However, this is not a panacea of our all problems.

 

Government and RBI has to act decisively and swiftly to manage the current foreign exchange crisis on the back of large current account deficit. Otherwise, it will inflict permanent scar on the Indian economy..

 

Time is ticking fast.. Let us have resolve and conviction to reclaim our glory...