Ongoing progress of the Indian economy amidst many challenges

- Aataapakarana Atapata: Dhawal Mehta

Declining economic growth rate

Everyone is worried about when India's economy will grow faster with an average growth rate of seven per cent. There is no reason to believe that India's economy has slowed down due to the Kovid epidemic. F.W. In 2016-2017, India's economic growth rate was 7.5 percent. It has come down to 8.1 per cent in 2016-2017, 7.1 per cent in 2016-2017 and 7.5 per cent in 2015-2020. The decline cannot be blamed on the Kovid epidemic that started in our country in March 2020. In addition, the prices of consumer goods in India have been very high. Rising diesel and petrol prices have made most consumer goods more expensive. This is because almost all consumables require transport vehicles and these vehicles run on diesel, petrol or gas. In India, the price hike has broken the two-to-six per cent limit set by the government. And now a shortage of coal could seriously affect the power supply. Of course, the effect of the second wave of Kovid in India is diminishing but the fear of when the third wave will come is haunting everyone. The economy is recovering. It is projected to grow by 5% by the end of 2021-203. But this will happen due to low base. In addition, India's foreign exchange reserves reached. 20.1 billion on October 4. That's a good thing. Although Raghuram Rajan believes that a large number of middle class people are going into poverty due to the epidemic, there is no dispute that India's economy is recovering. Compared to India's inflation of more than 5 per cent, the eurozone's price rise to 5.1 per cent in October 2021 has caused a stir. The eurozone has seen the biggest price rise of 6.1 per cent in 15 years while it is normal in India. Of course, in India, if the price rise goes up to 9 to 11 per cent and this situation continues for more than 6 months, the stability of the central government will be jeopardized.

Control inflation

If the government cannot control inflation and prices rise by 8 to 11 per cent in each sector due to high prices of inputs like coal, petrol, diesel, fertilizer, cement, then violent and non-violent demonstrations and resistance rallies against the government will start. Despite many adversities, the IMF is of the view that India will achieve an average economic growth rate of 3% per annum in three to five years.

Recovery in six months

Venu Srinivasan, chairman of TVS Motor Company, said in a statement that India's economy would be out of the swamp in the next six months. The monsoon in India has been very good so farm production will increase a lot, and the current third wave of covid is much softer than its other waves. By January 203, Kovid would have passed away or we would have developed the skills to live with him. Rural India suffered heavy losses during the second wave of Kovid, which will be offset by the current good monsoon. In addition, the government has received much more tax revenue in the financial year 2021-204 than in previous years. According to Aditi Narayan, head of ICRA, India's fiscal deficit will be between 6% and 7.5% in 2021-202. Earlier, it was projected to go up to 7.5 per cent. This is a good thing to be marginalized. The government will not fall into the vicious cycle of inflation.