As global economic growth slows during the pandemic, people are looking for the next big driver of growth. With a GDP of $3.1 trillion, India is the world's sixth-largest economy. The country has one of the highest GDP growth rates in the world. India's GDP will likely grow by 8-8.5% in FY22, according to the 2021-22 Economic Survey of India.
Let’s look at how the Indian economy performs on various economic indicators. Over the years, the Indian government has introduced many initiatives to strengthen the nation's economy. The government has been effective in developing policies and programmes that are not only beneficial for citizens to improve their financial stability but also for the overall growth of the economy. Over the recent decade, India's rapid economic growth has led to a substantial increase in demand for exports. Some of the initiatives taken by the government to improve the economic condition of the country are mentioned below:
1. The Reserve Bank of India (RBI) approved international trade settlements in Indian rupees (INR) in order to promote the growth of global trade with emphasis on exports from India and to support the increasing interest of the global trading community. 2. The Government of India is expected to increase public health spending to 2.5% of the GDP by 2025.
3. The budget 2022-23 had four priorities: PM Gati Shakti (see below: this project can boost up the Indian economy), Inclusive Development, Productivity Enhancement and Investment, and Financing of Investments. In the Union Budget 2022-23, effective capital expenditure is expected to increase by 27% at ₹10.68 lakh crore (US$ 142.93 billion) to boost the economy. This will be 4.1% of the total Gross Domestic Production (GDP).
4. The National Asset Reconstruction Company Ltd (NARCL) proposed to acquire bad loans worth up to ₹50,000 crore (US$ 6.69 billion). This will clean up India's financial system and help fuel liquidity and boost the Indian economy.
5. National Bank for Financing Infrastructure and Development (NaBFID) is a bank that will provide non-recourse infrastructure financing and is expected to support projects; it is expected to raise rupees ₹4000 billion (US$ 53.58 billion) in the next three years.
6. Before pandemic, Union Cabinet approved major reforms in the telecom sector (5G has been launched), which are expected to boost employment and growth.
However, there are wide disparities within the country's economy -- while 6.25% of the total population pays income tax, it also has one of the highest numbers of billionaires in the world. The per capita income has risen rapidly in the recent past yet millions of people continue to live in extreme poverty.
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PM Gati Shakti: The full form of PM Gati Shakti is Prime Minister Gati Shakti project. In India Gati means boost up and Shakti means Energy. The aim of this projects is to ensure integrated planning and implementation of infrastructure projects in the next four years, with focus on expediting works on the ground, saving costs and creating jobs. This can boost up the Indian economy.
Suman Ghosh is a master's student in Economics from North Bengal University, who is passionate about policy analysis and data interpretation.