Que. Do you agree with the view that steady GDP growth and low inflation have left the Indian economy in good shape? Give reasons in support of your arguments.
क्या आप इस मत से सहमत हैं कि सकल घरेलू उत्पाद (जी.डी.पी.) की स्थायी संवृद्धि तथा निम्न मुद्रास्फीति के कारण भारतीय अर्थव्यवस्था अच्छी स्थिति में है? अपने तर्कों के समर्थन में कारण दीजिए।
Structure of the Answer
(i) Introduction: Present a balanced view of “steady GDP growth” and “low inflation” as key factors for a stable economy, setting up for evaluation.
(ii) Main Body: Examine the impacts of GDP growth and low inflation on economic indicators like employment, income, investments, and socio-economic conditions.
(iii) Conclusion: Summarize the overall effect of “steady growth” and “low inflation” on India’s economy, stressing necessary reforms for sustained health.
Introduction
Steady “GDP growth” and “low inflation” have contributed positively to India’s economic stability, fostering investment and consumer confidence. However, challenges like income inequality and limited job creation indicate that economic gains remain unevenly distributed.
Positive Impacts of Steady GDP Growth and Low Inflation
(i) Stability in Macroeconomic Environment: Steady GDP growth coupled with low inflation offers a stable environment for “investment” and “fiscal planning,” essential for consistent economic expansion.
(ii) Enhanced Purchasing Power: Low inflation protects “consumer purchasing power,” enabling better living standards and reducing the adverse effects of price volatility on households.
(iii) Investor Confidence Boost: Investors view stable GDP growth positively, leading to higher “foreign direct investment” (FDI) and stimulating capital formation in various sectors.
(iv) Lowering of Interest Rates: Controlled inflation allows “monetary policy” adjustments, keeping interest rates low, which facilitates loans for businesses and boosts economic activity.
(v) Sustainable Fiscal Policies: Low inflation and consistent growth reduce fiscal pressures on government, enabling more balanced “budgetary allocations” toward development projects.
Limitations in Interpreting GDP Growth and Inflation as Economic Health
(i) Unequal Growth Distribution: GDP growth has not uniformly benefited all sectors; “informal sectors” and rural regions still face economic stagnation and income disparity.
(ii) Limited Employment Opportunities: Growth has been capital-intensive rather than labour-intensive, limiting job creation, especially for unskilled and semi-skilled labour segments.
(iii) Persistent Income Inequality: Economic gains from steady GDP growth often benefit urban and affluent groups more, aggravating “income inequality” and social disparity.
(iv) Structural Challenges in Agriculture: While GDP growth impacts industry positively, “agriculture” struggles due to low productivity, climate issues, and limited access to technology.
(v) Underinvestment in Social Sectors: Health and education sectors lack adequate investment, limiting human capital development despite macroeconomic stability.
Measures to Strengthen Economic Stability Further
(i) Focus on Inclusive Growth: Targeted programs can drive benefits of growth to rural and backward areas, ensuring “equitable development” across demographics.
(ii) Shift Towards Labour-Intensive Industries: Policies to develop “labour-intensive industries” like manufacturing will create more jobs and balance economic gains across income groups.
(iii) Investment in Human Capital: Increased budget for health and education will improve workforce productivity and enable long-term sustainable growth beyond GDP metrics.
(iv) Support for Agricultural Transformation: Technology and infrastructure investment in “agriculture” can boost rural incomes, aiding in the holistic growth of the economy.
(v) Encourage MSME Development: Strengthening MSMEs enhances employment and local economies, helping reduce income inequality and fostering broad-based economic resilience.
Conclusion
Steady “GDP growth” and “low inflation” have positioned India favorably, yet balanced policies for inclusive, labour-centric, and sector-diverse growth remain vital for sustainable economic health.
