“Indian economy has evolved over the last seven decades from a closed, backward and agrarian, with a command and control system of policy into an open and mature economy under a market friendly environment,” said former Chairman of AP State Council of Higher Education K.C. Reddy.
He was delivering a lecture on ‘Indian Economy – Retrospect and Prospect’, organised by the Centre for Policy Studies at Visakhapatnam Public Library here on Friday.
Prof. Reddy, who is also The former chairman of APSCHE and president of Indian Economic Association, narrated India’s quest for sustainable development during the last 70 years making special reference to current developments and future prospects.
There has been significant improvement in the rate of growth of the economy from what was popularly identified as a Hindu Growth Rate of 3.5 percent into fastest growing economy.
There are still concerns, particularly on the social front and the rural economy. Also, economic growth has not reduced interpersonal inequalities. Over the years there have been improvements in the resource allocation towards the social sectors including education and health as reflected in improved enrolment and life expectancy, he said.
However, concerns of quality in both education and health are still making the programmes ineffective.
According to him, India's other major areas seeking a proactive role from the government are on the investment and employment front.
For the last few years rate of investment has been declining and the current investment at 27 % is lower by 11% of the peak level of 2008. To accelerate growth rate strategies to improve both investment and productivity are needed, he said.
Prof. Reddy said private investment particularly has been declining largely due to recent developments, both domestic and international. Government need to raise its own investment into infrastructure to improve the situation. “While the developments in USA, Britain and France might have adverse impact on the export front, the overall improvement in the global environment will help India to sustain its accelerated growth,” he said.
Every year about 10 million are entering into the job market, but studies show very evidently that India has been creating only about a million formal jobs in the organised sector, which is what the young aspirational Indian is asking for. Growth strategy must capture this important dimension, he said.
Two recent major decisions of the current NDA government have become subject of intense debate. Demonetisation was expected to financialise savings and GST is expected to formalise the economy. While demonetisation objectives are probably ill conceived at least from economics standpoint GST is a desired policy, Prof. Reddy said.
It's a classic case a good policy initiative becoming ineffective and to some extent impacting the economy adversely largely because of inadequate preparation. However, it is bound to help the economy in the long run. The sooner the governmental machinery resolves the glitches in the scheme the better it will be for the nation and for the larger global economic climate, he said.
Director of the centre and former AU Rector introduced the speaker.
