India is sixth largest economy in the world. In Union Budget 2019-20, GDP is expected to grow at 7%. Being second most populous country with 1.40 billion spread across urban areas, small towns and rural areas, there are enormous issues that Indian economy is dealing with. All these issues are equally important to achieve the expected growth rate of 7%. Some of them are highlighted as follows:-
Unemployment front- The unemployment statistics being released by Ministry of Statistics and Program Implementation (MoSPI) has shown that unemployment rate in India was 6.1% in 2017-2018 which was highest in the two decades. There has been 15% increase in unemployment rate among youth aged 20-24 years since 2016. The report was published after a long delay and when the figures came, the reason being given by the government for spike in joblessness was that they have used a new methodology and thus, these figures can’t be compared with the previous ones. A report published by International Labor Organization (ILO) shows that economic growth of 1% leads to 0.3% employment generation. Approximately 5% of India’s total workforce is formally skilled against 75% in Germany and 80% in Japan. According to World Bank, India needs to create 8.1 million jobs in a year to reduce its unemployment rate.
Agriculture Distress- Though majority of India’s population is dependent upon agriculture for its livelihood, the share of agriculture sector in Gross Domestic Product (GDP) of India was 15.87% in 2018-19. Distress occurs due to low prices of agricultural product and thus, low income of farmers. The Govt. even has initiated a lot of insurance schemes like Pradhan Mantri Fasal Bima Yojana but the schemes are not much successful because of delay or denial to pay compensation in case of crop failure. Moreover, agricultural sector is not upgraded with the latest technology and there is no proper mechanism for agricultural marketing to take place. A recent research by Centre for Study of Developing Societies (CSDS) shows that more than 70% farmers are there in India who want to give up farming and opt some other profession.
Rising Non-Performing Assets (NPAs)- NPAs are loans or advances for which principal or interest payments remain outstanding for more than 90 days. Inspite of several initiatives by RBI and Central Government, the problem of NPAs remain an unsolved agenda. NPAs in India in March 2019 were 14.6%. According to Crisil report, NPAs in banks will reduce to 8% by March 2020. In fact, there are laws which deal with bad debts like SARFAESI Act (Securitization and Reconstruction of Financial Assets and Enforcement of Securities Interest Act) and DRT Act (Debt Recovery Tribunal). Even in July 2019, RBI imposed a fine of Rs. 7 crore on SBI for violating NPA norms.
Reservation System- Reservation to SCs / STs/ OBC is an age old practice and this is one of the reasons why India is still far behind other countries. Due to this reservation system, the talented people suffer. Today, Government has initiated a plethora of schemes for backward classes and their status has also improved a lot compared to the times it was few years back. Reservation system should be abolished in India.
Inadequate infrastructure and Primitive technological methods- Economic and social overheads of capital which include healthcare, transport, communication, science and technology and energy are inadequate in India. Majority of industries in India stick to old methods of technology. Only a limited number of industries upgrade themselves with the latest technological advancements. Moreover, new technology requires skilled human capital. Thus, skilled labor and poor human capital create obstacles in the development of Indian economy.
These are the various issues that are needed to be addressed by the current Government. No doubt, Government is putting the best effort to eradicate poverty, addressing health and hygiene issues. Collaborative endeavors to address these problems can help India in establishing itself as a model for world’s fast-growing nations. But the above mentioned issues are needed to be solved immediately. Only then India can achieve the status of global superpower.