6 Challenges That India Economy Needs To Overcome Immediately

BANGALORE: The Economy of India is the tenth-largest in the world by nominal GDP and the third-largest by purchasing power parity. India's voyage on the trail of economic improvement has renovated it to one of the world's fastest growing economies.

The IMF forecast that Indian Economy would grow by 7.5 percent in the 2015-16 fiscal years that starts on April 1, up from 7.2 percent (2014-15) percent in the year now ending.

With opportunities comes challenges and India has come through a long way overcoming challenges. Here are some of the challenges that are faced by the Indian economy that are needed to be dealt with iron hands to safeguard Indian economy.

# Realistic Fiscal Policy 

The ever increasing fiscal deficit as a result of the imbalance between Indian government’s revenue and expenditure is a major threat. Evil factor of this decade is this fiscal consolidation. How do we raise money without actually printing more money? Solution to this calls for a care. Just let the deficit bloat? NO, then there will be an increasing risk of inflation all over again.

Expenditures on wages and subsidies should be minimized and instead directed towards productive investments such as education, infrastructure, health and other areas which could enhance growth.

We must understand that consolidating fiscal deficit is what establishes the credibility of any government. A positive foreign sentiment contains the inflation and that in turn helps to cut rates further. Deducting the subsidies is not a bad option to go on the consolidation track.

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