18 APR,2019 | MEDC
It will be primarily driven by the continued strengthening of investment, especially that of the private sector. An improved export performance and resilient consumption will also help. The World Bank added that with robust growth and recovery of food prices, inflation is expected to converge towards four percent. This is within the comfort zone of the RBI. Both the current account and the fiscal deficit are also expected to narrow. On the external front, there are improvements in India’s export performance and that coupled with low oil prices are expected to reduce the current account deficit to 1.9% of the GDP. This is good news for India, and it is a broad reflection of the generally good governance practices being currently followed.
On the flip side, elections around the corner are inducing populist pressures in the economy. There are issues in core sector growth which plummeted to a 19 month low at 1.8% in the first month of 2019. Core sector growth has continued to decline as the two largest contributing sectors of electricity and refinery products stayed in the negative zone. Agriculture is also facing several problems, with a productive, competitive, diversified and sustainable agrarian economy continuing to remain a dream for the majority of the country’s farming community. Until rural poverty is measurably reduced through a socially inclusive strategy comprising both agriculture as well as non-farm employment, all talk of development will ring hollow.
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