Issues and Priorities for India
As India prepares herself for becoming an economic superpower, it must expedite socio-economic reforms and take steps for overcoming institutional and infrastructure bottlenecks in the system. Steps are to be taken for improving pace and development. There are certain challenges that Indian Economy is facing today.
There are three major sectors of Indian Economy
Agriculture
Agriculture and allied sectors like forestry, logging and fishing accounts for 25% of the GDP. It employs almost 58% of the total work force. It is the largest economic sector and plays a significant role in the overall socio-economic development of India. Due to steady improvement in irrigation, technology, modern agricultural practices the yield per unit area of all crops has increased tremendously.
Industry
Index of industrial production which measures the overall industrial growth rate was 10.1% in October 2004 as compared to 6.2% in October 2003. The largest sector here holds the textile industry. Automobile sector has also demonstrated the inherent strength of Indian labor and capital. The three main sub sectors of industry viz Mining & quarrying, manufacturing, and electricity, gas & water supply recorded growths of 5%, 8.8% and 7.1% respectively.
Services
The service sector is the fastest growing sector. It has the largest share in the GDP accounting for about 48% in 2000. Business services, communication services, financial services, community services,hotels and restaurants and trade services are among the fastest growing sectors.
As India prepares herself for becoming an economic superpower, it must expedite socio-economic reforms and take steps for overcoming institutional and infrastructure bottlenecks in the system. Steps are to be taken for improving pace and development. There are certain challenges that Indian Economy is facing today.
- One of the challenges in fiscal reform will be reconciling the need for fiscal consolidation with appropriate tax reform. Indirect taxes not only affect efficiency of resource allocation but also the investment climate.
- There is a paramount need to move Indian agriculture beyond its centuries’ old dependency on the monsoon by bringing more area under irrigation and by better water management. This has rightly been identified in the NCMP as one of the areas with the highest investment priority.
- Simplifying procedures and relaxing entry barriers for business activities. The ease with which firms are able to enter into and exit from business activities is an important determinant of the investment climate.
- The incipient investment boom in infrastructure, industry (including housing), and services will yield best results only if the enormous resource flows are successfully intermediated at a low cost.
- Farmers and enterprises should have access to finance at competitive rates and for all maturities for their credit-worthy projects.
- Infrastructural inadequacy constrains economic growth, particularly in the backward States and in the agriculture sector.
- Initiatives taken in a number of sectors like telecoms, roads, ports and civil aviation have started yielding results.
- There is a need for higher foreign investment, in the form of foreign direct investment (FDI) and FII. Such investment triggers technology spillovers, assists human capital formation, contributes to international trade integration and particularly exports, helps create a more competitive business environment, enhances enterprise development, increases total factor productivity and, more generally, improves the efficiency of resource use.
- Control of population is also a major reform that has to take place.
- Spreading of education is equally important in elevating the standards of Indian Economy.
- The eradication of poverty and unemployment is the abiding goal of India's development policies and programmes.
There are three major sectors of Indian Economy
Agriculture
Agriculture and allied sectors like forestry, logging and fishing accounts for 25% of the GDP. It employs almost 58% of the total work force. It is the largest economic sector and plays a significant role in the overall socio-economic development of India. Due to steady improvement in irrigation, technology, modern agricultural practices the yield per unit area of all crops has increased tremendously.
Industry
Index of industrial production which measures the overall industrial growth rate was 10.1% in October 2004 as compared to 6.2% in October 2003. The largest sector here holds the textile industry. Automobile sector has also demonstrated the inherent strength of Indian labor and capital. The three main sub sectors of industry viz Mining & quarrying, manufacturing, and electricity, gas & water supply recorded growths of 5%, 8.8% and 7.1% respectively.
Services
The service sector is the fastest growing sector. It has the largest share in the GDP accounting for about 48% in 2000. Business services, communication services, financial services, community services,hotels and restaurants and trade services are among the fastest growing sectors.
