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Indian Economy's Strengths & Weaknesses-VRK100-01Sep2013

Indian Economy's Strengths & Weaknesses-VRK100-01Sep2013

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RamaKrishna Vadlamudi details Indian Economy's Strengths and Weaknesses.
RamaKrishna Vadlamudi details Indian Economy's Strengths and Weaknesses.

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Published by: RamaKrishna Vadlamudi on Sep 01, 2013
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RamaKrishna Vadlamudi, HYDERABAD 01 Sep 2013 
www.ramakrishnavadlamudi.blogspot.com 
“Strength is weakness,” said George Orwell 
The Strengths are:
 
The South-West Monsoon has been good this year providing boost to ruraleconomy and may bring down pressure on food prices
 
Foreign exchange reserves at $278 billion are sufficient to cover about sixmonths of imports
 
Steep fall in rupee may help India’s manufacturing sector with potential forhigher exports provided Indian products are priced competitively abroad
 
Growing wealth effect 
: Spurred by rising gold and real estate prices, Indians’ wealth has gone substantially in the last decade, providing boost to domesticconsumption though consumption growth rates may come down in future
 
Savings rate is high at around 30 per cent though it has come down in the lastthree to four years (of course, the high savings rate is mainly due to the fact thatcommon people have no social security)
 
India’s population is very young providing good demographic benefits in theform of higher productivity and higher consumption of goods and services
 
Poverty has declined substantially of late though we are plagued withmalnutrition, lack of potable water & sanitation, and illiteracy 
 
The level of entrepreneurship has gone up substantially after liberalization
 
India has vast natural resources, such as iron ore, coal, water and arable land
 
India’s skills in export sectors – like, software services, engineering goods,gems & jewellery and garments – are well recognized across the world
 
If implemented properly, Goods and Services Tax (GST) will boost tax revenues
 
India has vast potential for tourism—be it medical, heritage or wildlife
The weaknesses are:
 
Loss of confidence in India’s ability to fix the economic problems and lack of strong political leadership
 
Falling Indian rupee is reflecting lack of economic reforms since 2004,though the Government lowered subsidies on petrol and diesel to some extent
 
Current account deficit has gone out of hand putting pressure on rupee

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