Economy’s fundamentals robust amid ‘strong downsides’: Survey
(Source – The Hindu, International Edition – Page No. – 1)
| Topic: GS3 – Indian Economy |
| Context |
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Economic Growth Projections
- India’s economy is expected to grow between 6.3% and 6.8% in 2025-26, slightly higher than the estimated 6.4% this year.
- The Economic Survey acknowledges strong economic fundamentals but also highlights external risks affecting investment and output.
- Private sector investment growth has been subdued due to political uncertainties, global challenges, and overcapacity in some industries.
Challenges in Achieving ‘Viksit Bharat’
- India aims to become a developed nation (Viksit Bharat) by 2047, but achieving this requires a consistent 8% GDP growth for at least a decade.
- The investment rate must increase from the current 31% of GDP to 35% of GDP to sustain high growth.
Focus on Domestic Growth Drivers
- With global trade slowing due to geopolitical tensions, India must rely more on domestic economic drivers.
- The Survey suggests that deregulation is crucial for boosting investment and economic expansion.
Reducing Government Control
- The government should reduce excessive regulations and micromanagement to create a business-friendly environment.
- Simplifying compliance processes and reducing bureaucratic delays will help businesses focus on growth.
Building Trust in the Economy
- The Survey emphasizes the need to bridge the trust gap between government authorities, businesses, and citizens.
- Excessive regulations often favor big businesses, creating unfair competition and harming overall economic progress.
- The government must trust businesses and individuals to drive economic activities effectively.
