Mumbai- Reserve Bank of India, as a statutory body, is working flawlessly in the country. As an Apex institution, RBI reforms after globalization really worked in the country. As far as the economy is concerned, the averagely 4-6 % GDP rate was constant after the economic depression in 2007. India’s economy has always been focused on controlling the balance between Reformist Growth Policies and Populist Government welfare schemes. Notable economists are optimistic about the economy, but after Monetization and GST, and other policy changes, things are changing at a fast speed.
Though mixed economy, frankly, I think it is government policies that can impact the economy to a large extent. Need fast growth by more competitive business opportunities in the private sector, the same time the primary interest of government organization needs to work per ordinary people. The IT industry and Service provide companies at growing at large speed for their more contribution to GDP. At the same time, the agricultural sector is moving at a constant speed. India, as the agrarian economy, can develop a contribution to GDP as still, India 80 percent population exists in rural areas. But there are many factors that create an impact on an agricultural economy. Rising migration towards cities is an important indicator for increasing service sector GDP contribution. To manage increasing agricultural production, Organic farming and improving agricultural infrastructure are helping to cover GDP growth. But now, there is a need for high acceleration in GDP growth simultaneously.
Still, India is ranked 129 on Human Development Index is a significant factor to consider for reaching low benefits at common people’s perusal. It is our responsibility to counter economic problems by creating more job opportunities in Insurance, Finance Sector, Service Industry, Manufacturing Sector, Health Sector, Hospitality, and Tourism Industry. Due to the current low Profitability due to a more competitive revenue model telecommunication sector is now on strike to raise prices. It can also create an indirect impact on telecommunication and internet services. Now there is a need to have intervention through Tribune advisory. The IT sector is as usual growing at high speed, which can be a good signal for economy.
A structural audit by RBI is required today. The entertainment and film industry suffered more, especially during the lockdown period. Many high-budget movies are becoming flops at the box office consistently. Hardly two out fifty become hit at the box office. Rising OTT platform influence has become an important factor for theatre owners for the loss of revenue generation. Now it is the responsibility of Movie Producers, distributors, and theater owners to introduce a more competitive platform and service for rising movie theatre contribution to GDP. Infrastructure facilities are also growing at a constant level. To tackle the problem of traffic jams and the high population there is a need to have better infrastructure. But the problem is Corruption, Red Tape Governance; Politics are the barrier to improved efficiency of road transport, roads, and infrastructure. Qualitative changes can solve efficiency problems as well as help for cost savings on the project.
From a defense industry perspective, we still depend on other countries for importing high-tech arms, ammunition, and defense equipment. It impacts heavy expenditure from government revenue and tax regime to pay a high price and also on salaries of defense staff. Instead of importing, if we indulge largely produce defense equipment, it will save cost and help to keep more revenue and profitability. The current Agniveer scheme is controversial; there is a lack of certainty in long-term employment opportunities and an uncertain future for selected defense candidates.
The rising competition in the Insurance sector opened more doors for futuristic mutual funds and the commodity market. Crypto Currency is now expanding its horizon to a large extent. The increasing demand for Bitcoin and other crypto is now becoming the platform of investment opportunities. Even More profitable equity investments, large people still prefer fix return model for stable income. To facilitate more in the stock market, B and C Categories listed companies need to grow. It might create more profit opportunities for a good return on investment. At the same time Increase in company’s contribution to GDP can make a difference.
The current situation in Srilanka, Bangladesh, is creating challenges for the economy to counter inflation. At the same time, RBI has the challenge of increasing forex and currency reserves for a sound economic position. From last year the value of Indian Rupees is decreasing in currency exchange which impacts vastly on the price of petrol, diesel products. Though the invention of electronic vehicles, it seems that still, consumers do not prefer electronic vehicles for high maintenance costs and lack of better functioning. Government is not willing to reduce duties on imports and tax levies on many commodities.
To some extent, the direct tax amount is rising slowly; at the same time, indirect taxes and GST tax level is rising at a very high level. So even with slow improvement in per capita income, there is a high levy tax on income which creates an equilibrium situation in Indian Market. Reliable part is continuous improvement and rapid invention in smart phone and electronic gadget market there are improving employment generation and better infrastructure to develop new software. Since more tax levies on a smartphone, there are chances to hike the price of the smartphone.
FMCG sector GDP contribution is most flexible and constant in compare to other industry. The inventory management of the FMCG model helps to create more options for Indian and foreign brands. Due to the Russia-Ukraine War, the import-export market contribution is reduced, but increasing demand and production of the manufacturing sector will cover losses in the Import-Export sector GDP. It is now a big task for the government to control the REPO Rate and Reverse REPO Rate to strike a balance between housing loans and foreign investment plans in the finance sector to improve the constant profit margin of companies.
Indian Market is rising as one of the fast-paced economies there are lots of issues look upon. To frame better strategies, it is the duty of the current government to focus on vibrant economic factors instead of focusing on populist welfare schemes. Though in the UPA government, 7 to 8% GDP growth is significant under the leadership of Prime Minister Dr.Manmohan Singh despite the coalition government and curtailed economic depression impact after 2007-2008. Under PM Modi’s regime, despite backdrop of slow improvement after demonetization and now after the impact of lockdown period now trend is tending toward equilibrium. But economic performance is too slow than expected. Projects like Make in India and Startup India not showing significant performance for increasing the GDP revenue model.
This opinion article written by Mohit Soman, Senior Journalist Prittle Prattle News.
(The opinion expressed in the article are personal )
