DMPQ:Economic growth in India has been broadly on an accelerating path. It is likely to be the fastest growing major economy in the world in the medium-term. Suggest ways to have double digit growth in the medium term.

Economic growth is key to the overall development. The growth accompanied by regulatory environment for inclusive growth can be a booster for Indian economy. Further, all global agencies like world bank, IMF etc. have termed India to be bright spot in the light of low growth rate of global economy. But, the economic environment must ensure following thing for a double digit growth period.

  1. Raising investment rate more than 36%. There is a need to boost up both public and private investment.
  2. India should strive towards increasing tax/gdp ratio which is just 17% and very low compared to its peer countries like Brazil(34%) and S. Africa( 27%).
  3. There is a need to increase share of government capital expenditure in total budget. This is currently 4% and need to be increased to 7%. Minimizing effective revenue deficit.
  4. Investment in housing will have a multiplier effect on economy.
  5. Attraction of Foreign direct investment by liberalising the norms.
  6. The government should continue to exit central public sector enterprise that are not strategic in nature. Inefficient CPSE surviving on government support distort entire sector.
  7. Need to encourage Private investment in infrastructure which is currently in dormant stage.
  8. Macroeconomic stability shall be prudent and stable enough.
  9. Financial intermediation shall be efficient like stock market, banking sector etc.
  10. Focussed approach on export and manufacturing sector. More emphasis on logistics sector. Power tariffs structure may be rationalised to ensure global competitiveness of Indian industries.
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