Current account deficit challenges indias economy essay

India lags behind the modern world in many ways. Get a free 10 week email series that will teach you how to start investing. Also, the large deficit caused the depreciation in the Rupee between and How should the gap in dollar supply be filled?

However, it could come to a crashing halt in if a recession or stock bear market slams the world. However, the economy still faces various problems and challenges, such as corruption, lack of infrastructure, poverty in rural areas and poor tax collection rates.

In business, a study found that China manufacturing is 1. The right way to fill the gap is by increasing the exports and decreasing the imports, which is a step easier said than done.

Although it is fallen a little in the past year. Trading Center Want to learn how to invest? Poor Infrastructure Many Indians lack basic amenities lack access to running water. However, so far economic growth has been highly uneven benefiting the skilled and wealthy disproportionately.

This limits economic development and a more skilled workforce. Corruption is also strengthened by poverty and lack of opportunity in the job market. Whilst the deficit remains, there is always the fear of a further devaluation in the Rupee. New Delhi and other cities in India are among the most polluted in the world, and car emissions in these urban areas are creating breathing and skin ailments.

It still allows little scope for increasing investment in public services like health and education. The solution timetable is very long and will consume many years of effort by more than one generation.

3 Economic Challenges India Faces in 2016

Roads Post independence, the country has progressed significantly in building roads to connect its cities with its hinterland, but given that poor infrastructure is a major concern for India, the country needs a wider road network to carry the fruits of growth to far-flung villages.

If interest rates rise substantially it will leave those indebted facing rising interest payments and potentially reducing consumer spending in the future 6. Even as the country has progressed in laying out the basic framework to take the economy to high growth path by building roads and ports and ramping up the food grain production, a fast growing population and infrastructure woes demand more work to be done on multiple fronts.

Yes, there is gap between income and expenditure — But how to fill the gap? Deficit differs from debt, which is an accumulation of yearly deficits. This is the most inefficient sector of the economy and reform has proved slow. Heading intohowever, the economic challenges India faces are more deep-rooted, persistent and harder to solve.

Fiscal Deficit and Current Account Deficit: The Twin Deficits

Poor tax collection rates. Inefficient agriculture Agriculture produces The fiscal situation in India improved with the current account deficit falling to 1. Economics Notes and last updated on April 3rd, at 8: Public transportation and roadways have not kept pace with population growth.

The reasons for this damaging practice include competing government bureaucracies, a complex and opaque tax system and a lack of clear laws and procedures. But, the Indian economy has seen imports growth faster than exports. Trades Unions have an important political power base and governments often shy away from tackling potentially politically sensitive labour laws.

It is worse in rural areas and amongst women. But uncontrolled borrowing is not good for the economy, as a greater portion of the governments revenue will in future be used to pay back the interest of loans and the money available for social sector initiatives will reduce.

Sanitation is a massive ongoing problem that the government has been unable to address. But, to feed the fast growing population, with more than a quarter of them still estimated to be below the poverty line, the country needs to produce more.

However, there are concerns about the risk of such loans. Balance of Payments deterioration. It also discourages foreign investment. Many children do not attend school at all and instead begin working before reaching their teen years. Large Budget Deficit India has one of the largest budget deficits in the developing world.

From 1947 to 2014: How the Indian economy has changed since independence

Indian public services are creaking under the strain of bureaucracy and inefficiency. Rigid labour Laws As an example Firms employing more than people cannot fire workers without government permission.India's Economy, Its Challenges, Opportunities and Impact Bollywood is More Popular than Hollywood.

Share Flip Pin Email India's combined current account and budget deficit is 12 percent of GDP. That puts more strain on its economy and government.

3 Economic Challenges India Faces in The fiscal situation in India improved with the current account deficit falling to % of gross the economic challenges India faces are more deep.

Current Account Deficit Challenges India's Economy Essay - The current account deficit is one of major challenges that Indian economy is facing. It has pulled down the. Higher trade deficit widens India’s current account deficit.

What it means for the Indian economy Feel free to use this image, just link to mint-body.com Fiscal Deficit and Current Account Deficit: The Twin Deficits Filed under: But uncontrolled borrowing is not good for the economy, as a greater portion of the governments revenue will in future be used to pay back the interest of loans and the money available for social sector initiatives will reduce.

Current Affairs Notes - National. India's current account deficit widened slightly to USD billion or percent of the GDP in the second quarter of from USD billion a year earlier ( percent of the GDP).

historical data, forecast, chart, statistics, economic calendar and news. India Current Account - actual data, historical chart and calendar of releases.

Download
Current account deficit challenges indias economy essay
Rated 0/5 based on 18 review