NEWS
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Context
- Economic deceleration is real. Acknowledging it is the first step to recovery
Reasons behind economic deceleration
- Freefall of rupee against dollar and other currencies
- Widening current account deficit (CAD)
- Soaring inflation
- Dampened GDP growth.
- Over-dependence on tertiary sector growth
- Various government policies
Step required for recovery
- Acknowledge the slowdown and spend on rural areas
- India needs to stop chasing the “mirage of a rating upgrade” and focus on spending more.(fiscal stimulus, SOP to exporters, etc)
- Cut interest rates, provide financing and stable business environment.
- Rationalising government policies(esp subsidies)
- Maintain Balance of payment
- Introducing reforms in various sector such as land reform, labour reform, service sector etc
Conclusion
There is a need to shift our focus from consumption to supply. It is high time we understand that being a consumer doesn’t count in the long run; it is being a producer that counts, and that is the key to becoming an economic super-power.
