Why Indian Economy Growth is Slow – 5.7% and How to Accelerate it Further

1. Report from CSO – Central Statistics Office
   • Indian GDP in the first quarter of 2017 is 5.7 %, down from 7.6 last year.
   • GVA – Grows Value Added grew at at 5.6 %
   • Manufacturing Growth is even worse which is just 1.2 %.
   • Our Economy growth has fallen from 6 % which is way lower then RBI predictions.
     
2. Possible Reasons Behind the Lower Growth
   • Most important  and wide spread reasons are GST implementation which has forced de-stocking and not manufacturing new stocks due to un predictability in the tax rates.
   • Demonetization effect which hit the unorganized sectors heaving, loss in jobs and affected the agricutlure sector growth.
3. Other Possible Reasons for the Low Growth Apart from above two 
   • Growth rates are affected by Both Internal and External Demands – like export growth.
   • Low Export Growth Rate or even negative export has slowed down the entire economy which came at the same time as low growth rate
   • • From 2014-15 growth is  negative.
     • Low Growth rate is due to advancement of exporting countries like china, usa etc.
     • Ruppe value is getting stronger which is negatively affecting the export sector as well.
   • Fall in Investment Rate
   • • Sharp decline in the investment rate in the recent years it is 27.%, decline is more in private investment.
     • Both Corporate and Household investment is being decreased.
     • Recent investment has not resulted in employment rate as well.
     • Growth is related to employment as – Better utilization of the resource available and more investment to use the resources.
     • Low iinvestmentin FDI in the first quarter of 2017.
4. How to Increase the Accelerate the Economy Further
   • Bring Private investment 
   • • Bring right investment this will increase the growth.
     • Create the environment to flow the money – ease of doing business.
     • Few recent changes to accommodate are ease of doing business are – Bankruptncy Code, GST and FDI rule change.
   • Focus on Governance and NPA Issue 
   • • Indian banks need huge money and get away from NPA to offer better credit for the investment.
     • Increase the disinvestment to fill the gap which banks needed.
     •  Fix the infrastructure project which are stalled.
   • Focus on SMES – analyse industrry specifc issues and give them way to solve them.
5. To Conclude,
   After GST settlment growth may pic back to 6.5% or so, to move the economy further focus on private and public investments which will ease the pressure on slow growth of economy.Source The Hindu

More Article on Economic Growth :

• Understanding the Slow Down In Economy : Slow Growth Reasons and Remedy – The Hindu Editorial on 16th Sept.