Tuesday, June 07 2022


The worst is clearly behind us post the COVID 19 pandemic and India is once again on a high growth trajectory. However, there are heightened geopolitical dynamics in the wake of the Russia-Ukraine war, the high fuel prices, elevated logistics cost and interest cost, volatile capital flows and exchange rate volatility and the scramble for safe haven and the attendant correction in asset prices. The emergence of newer variants of the pandemic and monkey-pox has also thrown a spanner in the Indian growth story.

The challenges at the present juncture include enhancing the share of manufacturing in India’s GDP vis-a-vis average in low and middle-income countries; adequately capitalizing on the inherent labor and skill cost advantages to develop large-scale labor intensive manufacturing; simplifying complex land and labour laws; providing productive employment and to absorb out-migration of labour from agriculture; and strong macroeconomic fundamentals including low and stable rates of inflation and a falling fiscal deficit. There is thus a compelling need for structural reforms to drive economic reforms and balanced and inclusive growth.

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