Addressing the Economic Challenges in India: Current Issues and Potential Solutions
India, despite experiencing economic challenges in recent years, is not in an outright economic crisis. However, the horizon is not entirely clear. Economic turbulence has affected millions of jobs, with the demonetization of large currency notes and the abrupt and poorly planned GST (Goods and Services Tax) implementation leading to the closure of numerous MSMEs (Micro, Small, and Medium Enterprises).
The Decline in Economic Growth
India's economic growth has been fluctuating, and the pandemic has amplified these issues. While the economic slowdown has been widespread globally, the focus on political gains rather than economic stability has further hindered progress. The current government’s priorities seem to center more on political maneuvering than substantial economic reform.
Key Issues: Employment, Trade Deficit, and Fiscal Deficits
Employment generation and income generation are crucial for economic growth, but these areas are underperforming. The trade deficit and government fiscal deficits are at a critical point, necessitating urgent attention. Continual borrowing from other countries to finance these deficits without increasing domestic savings could lead to severe economic consequences in the future.
The deficiencies in the economy are multifaceted. The literacy rate needs improvement, and there's a need to focus on education and skill development to enhance human capital. Infrastructure investment and capital formation are also crucial. Enhancing public savings through incentives, reducing unnecessary government expenditures, and broadening the income tax base (currently only 4% of the population pays income tax) are part of the necessary reforms.
Health and Education
Beyond economic reforms, improving public health and education systems are vital. These sectors require increased investment and attention to ensure a sustainable and inclusive growth trajectory.
The political stance of the current government has been criticized for prioritizing litigation against critics, as evidenced in the case of 49 celebrities facing multiple false cases. Despite proclamations about tackling economic crises, the official seems to have lost interest in addressing them post-2013, focusing more on other matters.
It is imperative for policymakers to shift their focus back to genuine economic reform and long-term planning, rather than short-term political gains. Only through a comprehensive and inclusive approach can India address its current economic challenges and achieve sustainable growth.