26 AUG,2019 | MEDC
The Indian economy is fragmented in most sectors. There is no global scale and so efficiency gains remain meagre and underutilized. That is why we have not profited from the ongoing global trade war to the desired extent. Focus should remain on addressing basic plumbing issues, such as skill development and the reform of factor markets – primarily land and labour. Once confidence is lost, regaining it becomes difficult, but it is necessary. It is imperative to boost the economy’s flagging animal spirits, which is the main reason behind the current business pessimism. This is also where strategic governmental intervention makes a difference. Sectoral reforms need to be pursued aggressively, rather than simply settling for piecemeal stimulus packages to revive the economy.
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