Economic Development in India
Internationally, India plays a very important role in the leadership of emerging markets and developing nations as it forms the ‘I’ in the BRIC group of nations. Recent polls have revealed that the Indian youth and business people are extremely confident that a bright future lays ahead for India. India has the potential to become the largest economy by 2050, however; potential does not always translate into growth. India is an economy that was once shining and is now rapidly losing that shine. India is at a serious risk of plunging itself into a crisis. The primary challenge for India is to sustain its growth while spreading the benefits more widely throughout the country.
Over the past 12 months, the optimistic mood within India’s economy has quickly faded. In 2011-2012, India’s GDP growth slowed to the worst it has been in 9 years – 6.3% and in the first quarter of 2012, India only grew by a measly 5.3%, according to some estimates. While some of the challenges this economy has been facing have been relatively recent, India has been struggling with a rising inflation for more than two years, which included an inflation of food between 15-25%. In addition, the Indian rupee has become one of the worst performing currencies in the international market as it has been in sharp decline, decreasing by 25% in value in the past six months. India’s economy is showing signs of overheating with a growing demand and inability to match it with supply. Leading domestic business people have exerted frustration at the economic situation. Since business confidence is at a low, the IMF, OECD and financial rating agency S&P (Standards and Poor’s) are all issuing warnings to the Indian government.
Over the past 12 months, the optimistic mood within India’s economy has quickly faded. In 2011-2012, India’s GDP growth slowed to the worst it has been in 9 years – 6.3% and in the first quarter of 2012, India only grew by a measly 5.3%, according to some estimates. While some of the challenges this economy has been facing have been relatively recent, India has been struggling with a rising inflation for more than two years, which included an inflation of food between 15-25%. In addition, the Indian rupee has become one of the worst performing currencies in the international market as it has been in sharp decline, decreasing by 25% in value in the past six months. India’s economy is showing signs of overheating with a growing demand and inability to match it with supply. Leading domestic business people have exerted frustration at the economic situation. Since business confidence is at a low, the IMF, OECD and financial rating agency S&P (Standards and Poor’s) are all issuing warnings to the Indian government.
Major obstacles to India’s growth are: