State of the Indian economy

Abstract

The Indian economy has undergone diverse stages of makeover, over the years. India was among the better performing countries post the financial crisis period. However, the performance of the economy in recent years has rather been tardy due to many factors. Currently the Indian economy is facing a variety of challenges. Not just the global slowdown with bleak prospects for exports, but domestic factors are also playing a significant role in this grim situation. The IMF had recently revised downwards global growth rate. Amidst the already slow global recovery, emergence of new risks, such as uncertainties about expectations of withdrawal from unconventional monetary easing by the advanced economies is a cause of concern to India. Domestically, almost every macroeconomic indicator has been critical, be it industry, construction or services. The macroeconomic conditions in the country weakened during 2012-13. While growth came down to 5.0 per cent in2012-13 (a 10-year low), the first quarter of 2013-14 also indicated a considerable fall in growth, to 4.4 per cent (Table 1). The growth scenario is grim. Fast clearance of delayed and stalled projects, despite fierce election battles, would not immediately influence growth as there generally is a gestation lag. Aggregate demand remains weak primarily due to slowing private consumption and contracting fixed investment. Various surveys indicate that business confidence remains weak, while inflation expectations have increased. Read more at: https://www.scribd.com/document/185595316/AIEFS-Newsletter-NOV-2013