Essays

After 64 years of independence, if we scale the performance of India against other countries of the world, especially with those in Asia, we note that though a lot has been achieved, yet we need to do a lot more. We need to learn from our past follies and frame our future strategies accordingly. India has achieved many milestones, yet not enough has been done to eradicate poverty, illiteracy and other vital issues. In spite of the outstanding quality of our human capital, which is responsible for running many organizations in various fields of manufacturing, trading and services all across the globe, we have not been able to set the standard our internal market as per the world standards. We often fail to use the best effective human capital for running the country, both for public as well as private sectors. This needs serious thinking. Our own people excel outside the country in various sectors but we fail to optimally use the best talent of the nation for the growth of our own economy. We need to find ways of providing better opportunities to our people here in the country and stop brain drain, which in turn creates all sorts of other drain-outs from the country and nullifies its progress.

The Economic Reforms of deregulation and liberalization in India began in 1991. Since then, there has been noticeable fundamental and irreversible changes in the economy, government policies, outlook of business and industry and in the mindset of Indians in general. From a deficit economy of goods and foreign exchange, India has now become a surplus one; from an agro-based economy, it has emerged as service-oriented one. It is now gradually developing as knowledge-based New Economic Super-power. Finally, Indian companies have become globally competitive and 'Brand India' is getting global recognition. These positive changes have given more confidence to the government to introduce further reforms and liberalization. With this, the Indian economy has entered the second phase of reforms which began in 1991. A process of economic reform was essentially crisis-driven and was adopted in order to mitigate the-economic bankruptcy of the 1980s. A quick survey of the various reforms introduced so far by the government reveal that their components are the same because they aim at the one common end—of reducing fiscal indebtedness, trade liberalization and trade policy reforms. The economic reforms in India are characterized by such reforms as removal of quantity restrictions, rationalization of taxation, public sector disinvestment and restructuring of the public expenditure.

More than fifteen years have passed since the reforms were introduced and now it is time to take a look at the future of Indian economy by analyzing the present economic scenario. According to Central Statistical Organization (CSO), the Indian economy registered growth rate of 8.5% in the year 2010-11, Although, the agricultural sector has shown fluctuations, the Industry and Services have continued to expand steadily and have acted as twin engines propelling the overall economic growth of the economy. Despite spiraling global crude prices, the inflation has been modest and the rapid growth in exports and imports have been seen. India's food production crossed 235 million tonnes during 2010-11, as per the latest estimates. This amount is higher than the 233.8 million tonnes of 2008-09 and the 230.8 million tonnes of 2007-08. After the initiation of economic reforms, a faster development of physical infrastructure has been achieved. The cycle of Growth and Savings has been virtuous over the years and is to continue for years to come. The incidence of poverty has been reduced considerably.

Today, we need to see whether the current economic structure is suitable for a long-term growth of country. The picture seems to be sunny with the introduction of the 73rd-74th Amendments of the Constitution (1995) which have increased the scope of decentralization of political and economic power and devolution of fiscal authority to the local bodies such as the panchayats and nagarpalikas. This enables the economy to be sensitive to the local needs of the people and helps the benefits of the reforms to trickle down to the lower strata of the society. Moreover, with the outstanding performance of the software industry, changes in the skilled labour market are also evident. Not only is the skilled labour in this sector able to meet the high quality standards of the advanced nations, it is also able to command salaries which commensurate with its abilities. The emphasis in the present times of the economic reforms in India must be on resources' creation and management rather than demand management. Public sector disinvestment would raise current revenue besides reducing government liabilities. At the other end restructuring of expenditure would curb the unnecessary consumption liabilities and make them more sensitive to public investment needs.