Wg Cdr Mahesh Chander (Retd)
We, the people of India, have experienced economic uncertainties in the recent past wherein COVID stressed economic activities across the spectrum affected growth, sustainability and ability to withstand economic shocks during and post pandemic periods. It is quite evident from the fact that economic growth achieved during last couple of financial years, as per data published officially, remained quite below targets. However, unlike many other prominent economies of the world, India could fare well achieving GDP growth rate of 6.45% to 8.68% during 2018 to 2021 after three continuous declines of growth rate over previous financial years of 2018, 2019 and 2020 wherein -6.60% during 2020 with 10.33% decline from the previous year was experienced owing to COVID stressed lockdown. This clearly indicates that the Indian Economy started declining trend even before the onset of the worst pandemic of the decade. Going beyond these four financial years, it is also an acknowledged fact that an average growth rate of 6-7 percent has been maintained during last ten years. This moderate growth rate though enabled growing economy status in the contemporary world; it is incumbent on the part of ruling political party to effectively design her policy instrumentation to achieve nearing double digit growth rate for achieving the third largest economy of the world, as it is a 3.5 trillion dollar economy today and progressively moving towards 30-35 trillion dollar economy by turn of century age old democracy of the world in year 2047. It is expected that a critical analysis of the strong and weak economic parameters is carried out professionally to highlight the challenges that are likely to obstruct economic growth in the near future.
Rising density of population is a serious challenge confronting our economic growth. Recently, India surpassed China and became largest populated country in the world. It is also worth mentioning here that both the countries attained independence almost together but China has grown much faster economically and became second largest economy of the world despite being most populated country across the globe. Hence, the impediment likely to be created by density of population can be exploited as an opportunity of creating trained human resource hub for the entire globe. The Chinese model of providing skilled manpower to world market along with large scale production of consumables through small scale rural industry could be emulated for enhancing employability simultaneously of rural and urban area workers. Thus, a well laid out professional plan and its willful acceptability by political leadership of the country for effective apolitical execution is the call of the hour.
Another cause of concern and challenge is a large chunk of population around 22% as per latest data lives below poverty line. It means that a large portion of the population is not able to participate in the economy and continues to suffer vicious circle of poverty. This would require effective policy instrumentation through socio economic measures purely based on economic status of a citizen rather than caste structure as prevalent in the present system that remains susceptible to twist and turns for political dividends.
Unbridled unemployment is another challenge that is being faced and would continue to be faced by Indian Economy for times to come. The rate of unemployment in India is at a 45 year high and this affects a large portion of population especially employable qualified youths who could otherwise contribute towards economic growth of the country. This also leads to social problems and provides fertile ground to be exploited by our adversaries/competitors in the market. A densely populated country with unbridled high rate of unemployed is in itself a serious issue to be tackled through policy upgradation so that more and more employment opportunities are created unrestricted to traditional sectors of employment. Indian Economy can ill afford to remain technologically isolated in the present world where Artificial Intelligence, computerization and technical marvels would prevail and further minimize the employment spectrum.
Poor education is another challenge that would affect our economic growth in contemporary world. It is a recorded fact that literacy rate in India is around 76%, indicating that a large portion of Indian population would not be able to secure good jobs and as such they may not be able to participate in the economy effectively. Our education system as such is old and quite traditional in its course and contents that needs to be made more apt and professional to suit national and international job market. To make our large sized human resource ready to face upcoming challenges in education sector, it is desirable to cohesively reshape various professional and academic courses with updated content in a well-coordinated and balanced public – private entrepreneurship.
Another critical issue that has of late become a serious challenge for Indian Economy is Private Debt. It is noteworthy that private debt to GDP ratio in our country is the highest in the world. It means that lot of people have taken out loans and are not able to repay them. We have quite a number of examples where private debts have gone bad and concerned people have left our country to escape recovery actions. It has resulted in lot of financial losses affecting our economic growth.
Inadequate Infrastructure is a big challenge for the economy. It means infrastructure in India has not grown to cope up with growing population and results in problematic frequent traffic jams, erratic power supply cuts and water shortages. A balanced approach in maintaining existing infrastructure and creating additional to make up the deficiency is the call of the day.
Besides these challenges, Labour Laws are quite old and fixed by nature to meet the changing requirement of the present day labor market and it therefore paves way for inefficiency that ultimately hurts the economic growth over the period of time. Another malaise hurting economic interest of the country is unabated corruption in the system. It is a big challenge that brings in wastage, inefficiency and social issues as well. These are some of the challenges faced by Indian Economy highlighted in this write up, however high level of inflation, an unstable rupee and a large current account deficit also cause hindrance for economic growth of the country and to meet these challenges Indian Economy needs to be strengthened through effective policy instrumentation, transparent execution with wider public participation in the right spirit of the democracy.
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