Sansad TV: India’s Resilient Economy | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly - UPSC PDF Download

Introduction

• The World Bank predicts that India's economy will grow at a rate of 6.6 percent in fiscal year 2023-24, making it the fastest-growing economy among the seven largest emerging market and developing economies. While the global economy has a gloomy outlook, the World Bank believes that policy makers must focus on lowering the likelihood of a global recession, especially one caused by rapid and synchronous monetary policy tightening. 
• During the Madhya Pradesh Global Investor Summit, Prime Minister Narendra Modi stated that India has unprecedented confidence from institutions and credible voices tracking the global economy. Additionally, the National Statistical Office has estimated that India's economy will grow at 7 percent for the current financial year 2022-23.

Measures required to revive the economy

• The government must address the issue of slow economic growth and provide funds for investment by banks, housing finance companies, and MSMEs.
• It should also reverse some of the controversial budget proposals affecting the markets and corporate sector.
• The ease of doing business and living should be promoted, and government restrictions on imports should be avoided to prevent an increase in production costs.
• The auto sector issues must be addressed, and the RBI should increase cash in the economy through expansionary fiscal and monetary policy.
• Direct tax code reform is important for small businesses, and the administered price of credit needs to be reduced.
• To generate employment, labor laws, land, and agriculture reforms need to be amended, and the government must have detailed discussions with the private sector. A skills and industrial policy that makes use of reasonably priced labor is also necessary.

Challenges

• Creating jobs is a priority.
• Low farm output prices causing distress for farmers.
• Farm loan waivers not a solution due to NPAs in banks.
• Informal sector growth surpassing formal sector growth in services.
• Need to boost investment to counteract global slowdown.

Way Forward

• Reforms needed in land, labor, judiciary, and agricultural sectors.
• Improving rural wages and credit for increased consumption in rural areas.
• Attract investment and increase consumption.
• Focus on growth of domestic economy.
• Opportunities for private sector growth.
• Speed up resolution of NPAs and simplify bankruptcy framework.
• Enhance governance of public sector banks.
• Reform, perform, and transform the economy to overcome slowdown challenges.