Today, in the cut-throat race to be the best, not only humans, but nations too are competing with each other to assert their dominance. One of the major factors which determines this, is the economic status of the country. India boasts of being a fast-growing developing nation, world’s sixth largest economy and third largest by purchasing power parity.
Indian economy started its journey after independence with the formulation of the Planning Commission which strived to pull the country out of the abject poverty it was in. The economic development of India was dominated by socialist-influenced policies, state-owned sectors, and extensive regulations, collectively known as the “License Raj”, which ultimately led India to isolation. However, the scenario started changing from the 1990s, when India began opening up its market slowly through economic liberalization. The policy had a gigantic impact on the commerce field of India.
Talking of the present times, Pacific Regional Economic Outlook report has said that India is still recovering from the effects of demonetization and the introduction of the Goods and Services Tax and the recovery is expected to be underpinned by a rebound from transitory shocks and robust private consumption. The mounting current account deficit is expected to be financed by foreign direct investment inflows.
Presently, there are myriad grave issues which the economy is facing and they need to be addressed at the earliest. Economic growth should always be accompanied by equity which seems to be lesser in India as it has wide inequalities in its distribution of income, thus leading to a poverty-stricken population. Also, even after 72 years of Independence, the country continues to depend more on agriculture, in contrast to developed nations having the majority employed in tertiary activities. This leads to lesser capital formation for India. Stunted infrastructural development and technological advancement than the west also presents a major problem.
The rupee has fallen more than 7% against the US dollar since January, 2018. Oil imports, amid rising crude oil prices, are leading to an increased demand for the dollar which, in turn, is making the rupee weaker. Spike in prices of petroleum adds up flame to the adversities faced by common man in India.
India has emerged as the fastest growing economy in the world as per the Central Statistics Organization and is expected to be one of the top three economic powers of the world over the next 10 years, backed by its strong democracy and partnerships. So, even if currently the economy is facing a plethora of issues, there’s always a ray of hope to look up to and India being in its most dynamic phase of transition is sure to resolve these problems and stride further towards development.