How to revive Indian Economy?

Indian Economy which is the world’s fifth largest economy by Nominal GDP and the third in Purchasing Power Parties(PPP). which is been characterised as developing market economy. Which has a aim of reaching 5 TRILLION economy. The estimated population of India as on today is 1,326,093,247. Having GDP of $3.202 trillion (nominal; 2020 est.) $11.321 trillion (PPP;2020).

Now the question comes up how will we be able to revive our Economy?, How will we be able to achieve 5 Trillion economy?

In order to fight with this situation RBI introduced various measures. RBI Governor Shaktikanta Das announced a series of measures to “keep the financial system and financial markets sound, liquid and smoothly functioning so that finance keeps flowing to all stakeholders, especially those that are disadvantaged and vulnerable”.

The RBI lowered the reverse repo rate by 25 basis points to 3.75 per cent, thus discouraging banks from keeping their surplus funds with it. It ensured liquidity for small non-banking financial companies (NBFCs), and asked banks to lend at least half the money earmarked to be borrowed from the liquidity window to them.

This measure would definitely help various sectors and pump them up.

NEW FDI POLICY – As per the new amendment, FDI investments into Indian companies from the neighbouring countries will now require a NOD from the government. This will be applicable to all countries that share a land border with India – such as China among others. The main aim of this amendment is to stop Chinese companies and investors to take over Indian companies. Which means even the Government has decided and realized that the only competition of India is China. India needs to create such a environment which brings the investors from the China to India.

Many organizations feels that the world economy will collapse and are comparing this situation with WORLD DEPRESSION 1929 or World recession 2010. Yes we may get into recession but the chances of Depression is slightly low. Because this is a volunteer economy collapse. Everyone have decided to voluntarily stop economic activities and slow down the economic cycle.

WHAT CAN INDIA DO?

Top five Measures to be taken.

1. Help the retail sector.

2. Provide funds to Startups.

3. Work on Job creation.

4. Revive small scale industries.

5. Pumpup Small NBFC’S.

6. Attract Foreign investors.

One of the key measure which should be taken by Government is Devaluation of currency. In modern monetary policy, a devaluation is an official lowering of the value of a country’s currency within a fixed exchange-rate system, in which a monetary authority formally sets a lower exchange rate of the national currency in relation to a foreign reference.

Government can also go with distribution of money, giving liquid cash in the hands of the peoples. As our economy is Demand run economy and only way to revive our economy is to create demand which can be done by giving cash in the hands of the people. This will certainly bring back the economy to the track.