BUMPS AHEAD?

1.P.C. Maholonobis once stated as a "result of economic planning rich became richer and poor became poorer in India".]

2. During the freedom struggle Gandhiji highlighted the central role of agriculture and allied activities by stating that a number of times “India lives in villages'. By neglecting the villages India can never make any progress.

3. Nehru chose the Western model. Based on heavy industrialisation and implemented it through a centralized planning mechanism that he borrowed from the Soviet Union.

4. The central problems of the Indian economy still however, continue to be widespread and extreme poverty, low productivity and ever increasing disparities.

5. The only 'real' benefit of liberalization was that it freed certain sections from the oppressive control of the state.

6. With annual growth rate hovering below 5%, Asia's third-largest economy has been weighed down by high inflation, a weak currency and a drop in foreign investment.

7. Trade Unions have an important political power base and governments often shy away from tackling potentially politically sensitive labour laws.

8. India has one of the largest budget deficits in the developing world excluding subsidies it amounts to around 8% of GDP.

9. India has $170 million short term debt and to repay this debt India has to take loan from IMF.

10.Devaluation of rupay against $ and FII outflow can be major concerns.

11. However,one of the strengths is that India's intellectual, technical and engineering skills are very high.

To be continued...