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Indian economy facing problems.

shriram | 6th January 2015 | Business And Economy
Indian economy facing problems.

    A few things can be done to pull the economy out of its current troubles.

Poor Infrastructure : Indian business community repeatedly cites infrastructure as the single biggest hindrance to doing business, well ahead of corruption and bureaucracy.

Poor educational standards: Although India has benefited from a high % of English speakers. (important for call centre industry) there is still high levels of illiteracy amongst the population. It is worse in rural areas and amongst women. Over 50% of Indian women are illiterate. This limits economic development and a more skilled workforce.

Corruption: It must be noted, however, that the situation has been slowly improving since 2006.

Inefficient agriculture: Agriculture produces 17.4% of economic output but, over 51% of the work force are employed in agriculture. This is the most inefficient sector of the economy and reform has proved slow.

Rupee Depreciation: 20% drop in rupee against dollar since early 2011.

Slowdown in growth: 2013/14 has seen a slowdown in the rate of economic growth to 4-5%. Real GDP per capita growth is even lower. This is a cause for concern as India needs a high growth rate to see rising living standards, lower unemployment and encouraging investment. India has fallen behind China, which is a comparable developing economy

Inflation: The macroeconomic environment continues to be characterised by large and repeated public deficits and the highest debt-to-GDP ratio among the Brics.

Tax regulations: The country's supply of transport, ICT and energy infrastructure remains largely insufficient and ill-adapted to the needs of the economy.


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