Indian economy witnessed its maximum growth in recent years in FY 2006-07 where the growth was reported at 9.4%. Post 2006-07 the economy slumbered at an agonizing and painful pace.
According to a recent survey, Factory output in India for the September touched a record low owing to fewer export orders. The output indice is weakest since December 2013 and has gone down for a consecutive second month.
It has been four and a half months since the new government has sworn in. For normal times, this is just about the period when the honeymoon starts to finish and harsh realities face the incumbents. For some less fortunate like Arvind Kejriwal, it takes still lesser time.
But these are hardly normal times, aren’t these.
With every single passing day, expectations from Modi government are soaring. It seems, we still are in pre-election days of promises and more promises.
The current low output numbers could be shrugged off riding on the optimistic sentiments owing to high expectation from the (new) government. A youtube video of a pakistani journalist praising Narendra Modi went viral. Please see the same below.
It is not that things are not happening. But is the pace justified? There are many welcome developments like initiatives taken to repeal anarchic laws. Prime Minister’s efforts to reach out to people at a personal level are also heart rendering.
But all these will be seen as mere propaganda if something concrete and lasting is not done. The sooner the better. Else there is a chance that our dynamic Prime Minister will find himself in a whirlpool where he will raise the expectation level on daily basis and will fail to deliver.
India is at a very precarious stage demographically. The most important strength currently India can boast of is presence of almost 60% of its population under the age of 35. Our Prime Minister does not leave a chance to harp upon this fact in any of his public interaction.
But this strength will become a burden if India fails to create jobs for such massive young population and that is no mean task. Industry estimates suggest that a growth rate in the region of 9.5% is required to meet that target. This means India will have to nearly double its Industrial Output.
This in turn mean a very tight leash on government expenditure and boosting exports to ease the pressure on current account deficit. Increasing industrial efficiency by leaps and bounds. Fueling consumption to sustain growth and reviving investment.
Things are not going to be easy. It is evident so as RBI refused to cut lending rate despite business clamoring for same.
Make in India is a great philosophy but it has to be implemented in spirit. More concrete steps to be taken on FDI. Merely proclamations of intent will not be of any use. Real changes and commitment is needed. The whole mindset has to change particularly with respect to FDI.
And also it is time to be little optimistic.