How Can India Revive Its Economic Slowdown?
Despite being renowned for its fastest-growing economy, India has been struck-in the economic slowdown in recent times. RBI's fiscal year 2018-19 annual report states that the country's economy has precisely hit a rough patch. Also, the GDP growth rate of the economy has stumbled from eight percent to five percent in the Q1 of the fiscal year 2019-20, which marks it as the lowest in the past six years. This economic slowdown has tremendously affected several industries. This has weakened the consumer demand, which in turn deteriorating the manufacturing sector this is the major reason for economic slowdown of the country, alongside demonetization and GDP. But, how can India revive its economy and get back to normal?
Analyzing the Reason
The economic recovery cannot be achieved spontaneously but could be attained over a period of time. Firstly, the country has to be analyzed if the slowdown is structural or cyclical in nature and the cause for its occurrence. These two categories could directly boost the economic activity. The cyclical slowdown does not require any long-term plan, and the short-term plan is good to boost the growth and its vice-versa for the structural slowdown. Hence, economic policies have to be re-organized to find innovative measures to boost the country's economic growth. But, the current economic slowdown of the country could be a mix of both structural and cyclical factors, which would require short-term as well as long-term measures to overcome the sluggish growth rate.
Creating Job Opportunities
The other major challenge for the country's economy is creating job opportunities. With its population, India needs about one million job creation every month. But, India is nowhere even close to it. Indian youth between the age group of 15-24 years are about 26 percent of whom these job opportunities could target. Besides, agriculture has been the primary source of India, but at present, the agricultural income has saturated as the country is trying to cut down inflation. Though India could not accumulate the regular amount of agricultural income, it has been able to bring down inflation. This has usually been a huge problem for most of the developing countries, which India has overcome.
The short-term Indian economy is usually determined based on the monsoon and oil, while the long-term is determined by the geographies and demographics. The oil has been doing moderately, and the monsoon has also been good enough to bring in a decent economy in the forthcoming terms. Additionally, with the country's reasonable demographics, good working population, decent geography, and a high population density, we can expect a good economic elevation in the long term.
With all the facts, the Indian economy needs a revival action plan. Thus, the government must focus and refine the existing economy. This would eventually elevate the country to be one among the fast-progressing countries.