Indian economy has some inherent vulnerabilities and that is becoming hurdle in holistic development of the economy. These areas are as follows:
- Investment rate is on decline. It is near about 29%. It has to be 36-38% for sustaining high growth rate as per economic survey. Investment is way better than savings as engine of growth. Both Public and Private investment is the need of the hour.
- Industrial production: India has a unique growth story where major growth comes from service sector and India bypassed the Industrial sector. Since Industrial sector ensures equality and more jobs more emphasis has to be given on Industrial sector.
- NPA’s and their redressal: NPA’s are on higher side and they need to be managed. Since 2013 the NPA are on rise and has lead to twin sheet problem. It is affecting the overall investment climate of India. Corporate investment is on lower side and public investment has its own limitation.
- Fiscal deficit of states and debt management is also an issue that has to be look into. Centre is better managed while states are not. Doll outs , loan waiver have created more liability on treasury.
- Stagnation in agriculture is another issue. The growth rate in plateaued at lower lever which is a source of concern. Low investment in increasing the productivity of the agriculture is an issue.
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