Striving for Economic Growth
Contrary to the uncertain global economic outlook, India by virtue of impressive growth rates during the last few years has emerged as the fastest growing economy in the world. This is no mean achievement considering the fact that the world has gone through a series of turmoils, including the COVID-19 pandemic, which brought economic activities to a halt for nearly two years. India managed to avoid the growth rate to fall, thanks to sound strategies, effective implementation of policies and good performance by all three economic sectors. However, the country should remain vigilant and ensure that the fiscal deficit remains under permissible limits, which currently stands at an unideal 5.9. Policymakers on their part should be mindful of announcing freebies, as such moves may increase deficit and derail the growth trajectory of the economy.
Secondly, India should strive hard for inclusive growth as lop-sided growth is certain to give rise to economic disparity and widespread resentment among citizens. Such a situation should be avoided at all costs as unequal distribution of wealth can snowball into a bigger crisis, if remedial measures are not taken. So, the task in hand is to prevent fiscal deficit and rise of social divide. Keeping the fiscal deficit in check requires strict financial discipline that disallows unnecessary and unproductive government spending. By maintaining discipline while using government funds, India has achieved considerable success in recent times, though the pandemic disrupted it as the government was duty-bound to provide stimulants to keep the market going. At the same time, the government has incurred huge expenditure by providing food grains to the marginalised sections of society. Under these circumstances, poorly targeted subsidies will further complicate the situation.
Thus, both the Centre and the state governments should strive towards maintaining fiscal discipline. On the other hand, it will be a tough ask to bridge income disparity or to ensure equal distribution of wealth as most wealth is already concentrated in the hands of a few rich people, while a huge chunk of the population struggle to earn enough for two square meals a day. In this context, the government should ensure that sops to private investors have a reciprocal effect in bettering the lives of millions of Indians; otherwise the process of attracting private investments becomes redundant. In recent times, it has been found that many private enterprises have invested surplus funds outside the country, instead of investing in India. Such a trend should be stopped as it won’t do well to the economy of the country. If these issues are checked, the Indian economy may continue to grow steadily in the years to come.