Tuesday, 8 September 2015

Economic Reforms in India

Question; India needs to pursue reforms more effectively if it wants to benefit from the decline in China’s economy. Examine. 
 
Answer:
Since 2013-14, Indian GDP growth has been on a gradually rising trend. 
Why China 's decline: Non-market economy China, given its export- and investment-led growth model (with 45 per cent-plus investment rates), continued to build new capacity in tradable goods unmindful of the declining profitability. The consequent excess capacity put increased pressure on the profits and reinvestment of the globalised Indian corporate sector
  •  Agriculture sector reforms:
    • Infrastructure
    • Irrigation
    • Land reforms
    • Marketing
    • Direct Marketing / Contract farming
    • Insurance - Farm Income
  • Manufacturing Sector reforms:
    • Make in India
    • Labour reforms
    • Reforms in factory act
    • Energy / coal issues
    • Infrastructure
    • Land acquisition
    • Tax rationalisation
    • GST
    • Bkd Fwd linkages
    • Skills - employable 
  • Services Sector reforms:
    • Skills
    • Tax sops
    • Export competitiveness
    • Credit requirements
  • Administrative reforms:
    • Tax rate rationalisation 
    • no Tax terrorism
    • Ease of doing business
    • Boost demand
    • Instill confidence in markets
    • Attract foreign investments
    • government must ensure that on both the tax front and ease of doing business the changes reach down to the ground level where the vast majority of businesses (tiny, small and medium) operate. 
In the longer term, a decline in China’s growth and investment will reduce excess capacity in manufacturing and benefit India. But we will benefit only if we pursue our reforms more effectively.

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