Indian Macroeconomics

Only available on StudyMode
  • Download(s): 336
  • Published: March 20, 2011
Open Document
Text Preview
Transforming Macroeconomic growth into all round Economic Development of every Indian through achieving positiveness of ‘Balance of Trade’ coupled with tamed inflation. Problems to be addressed

Achievable in short termAchievable in long termAchievable in far future Increasing international competitiveness if service sectorIncrease in contribution of agriculture to GDPImprovement of infrastructure Improvement in sectors allied to agricultural sectorImprovement in public service and development sectorReduce dependency on oil imports Reduction in levels and time between project conception and implementationFormulate strategies to maintain sustained growthWipe off trade deficit Increase in government revenuesStabilization of inflation rateElimination of mismanagement of funds and corruption Introduction of GSTUnique Identification system for every citizen Improvement in sectors allied to agricultural sector

Agriculture is one of the strongholds of the Indian economy and accounts for 14.6 per cent of the country's gross domestic product (GDP) in 2009-10, and 10.23 per cent (provisional) of the total exports. Furthermore, the sector provided employment to 58.2 per cent of the work force. The total geographical area of India is 328.7 million hectares of which 140.3 million hectares is net sown area, while 193.7 million hectares is the gross cropped area, according to the Annual Report 2009-10 of the Ministry of Agriculture. According to Annual Report 2009-10 of the Ministry of Agriculture, production of food grains during 2009-10 is estimated at 216.85 million tones (MT) as per 2nd Advance Estimates. However the current storage capacity for agricultural goods is dismal with the total national and state storage capacities at around 120 million tones (including private storage facilities) which is a shortfall of more than 100 million metric tones. This lack of storage capacity leads to several problems, like surplus of produce in the market leading to reduction of export prices. Also in times of domestic shortage, the lack of buffer stock leads to dependence on imports which are at a highly inflated rate increasing the trade deficit. Improvement in storage capacity and related infrastructure will go a great way in helping to enhance the effect of agricultural growth on the GDP of the nation. Increase in contribution of agriculture to GDP

One of the major economic issues faced by the country is agriculture. 43% of land in India is used for farming but contributes only 18% of the nation’s GDP. And this is the sector which is source of livelihood for about 54% of Indians till date. Thus this sector can be said to be a labor intensive sector capable of generating and maintaining jobs and thus helping to curb unemployment. However the growth of this sector has been of some concern for some time as it has been pegged at around 4%. In order to bring in greater growth in this sector, the government has resorted to various measures, like debt waivers on farmer loans, provisions for affordable interest on loans for other mechanized farm implements and machines etc. While debt waiver has been a tool used by the government to treat the agricultural crises, its effect is only seen at the superficial level. Whilst reducing the burden on farmers, it does nothing to increase their productivity and sustain growth of the agricultural sector. The task of increasing agricultural productivity requires investment into several key areas like improvement of irrigation systems, greater emphasis on research to find higher yielding strains of seeds, training of farmers to use latest machines and implements and trying to usher in another “GREEN REVOLUTION Increase in government revenues

Several untapped avenues for revenue exist, with the government which can be utilized to increase the revenue earnings. For example the current tax slabs in the nation are capped at 30% for persons earning salaries above Rs. 8,00,000/-...
tracking img