What's Wrong with the Indian Economy?

By SiliconIndia   |   Wednesday, 26 June 2013, 12:44 Hrs   |    2 Comments
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Bangalore: Paris-based think-tank OECD scaled down India's growth estimate to 5.3 percent for 2013 from 5.9 percent, and cautioned that structural bottlenecks could further constrain investment and growth potential.



Another global rating agency Moody's said that the country is struggling to boost investment and economic growth witnessing cautious private sector and relatively high inflation.



Though earlier it was forecasted that India is likely to become the world's fastest growing economy in 2012 but currently many are trying to figure out the facts behind the country’s underperformance. Business Insider explains few such facts that explain what’s wrong with the Indian economy.



1. Problem of Current Account Deficit



When the value of imports exceeds value of exports, it is known as current account deficit. This has been one of the major fears to India's economic fall.



In the last quarter the CAD (Current Account Deficit) was witnessed to reach a record high of 6.7 percent and is also considered as the reason behind rupee’s depreciation. As India is not a heavily dependent on exports, it counts for only 25 percent of the total GDP: while China’s exports account for about 31 percent.



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