indian economy enjoying roller coaster ride

Earlier (before the great fall of Lehman Brother’s scenario) India was growing very rapidly by achieving 9% GDP growth with individual growth of all its sectors. But as Lehman Brother fell down due to Sub-prime crisis it triggered the onset of liquidity crunch and recession (period of negative growth of GDP) all over the globe. And, after adopting the liberalization and globalization policies (1990-91) how then India can be untouched of these effects, so ultimately it faced the heat of slowdown. In this situation, growth of the economy fell down, demand dropped, banks stopped lending money, supply halted, businesses started dying out, stock markets dip down to all time low (from 20000 mark to 8000 mark), investors lost their money, bank’s NPA starts rising, unemployment increased, rupee depreciated against dollar ( from 30 to 50). The effects are so bad that a single sector or even a single individual got worsely affected.

But this is all a part of history now, because India and even whole world started coming out of it and every region is showing positive signs of growth because recession is a cyclical process and when trough comes then definitely crest will come. I must say that the regulatory framework of Indian government is so strong that they never let bad things to penetrate in our markets deeply. Thanks to RBI & SEBI which worked proactively and in unison to handle the crisis very smoothly with the help of different tools i.e., by reducing CRR, SLR, Repo rate, Reverse Repo rate, flexibility on buyback options, & 100% FDI approval to different sectors to boost the economy. To ease the liquidity position they forced the banks to start lending money so that businesses can start their production, and when production is there, supply increases which ultimately lower down the commodity prices thus reducing inflation. And, this model worked as inflation dip down from double digits i.e., nearly 13% to 0.3%. Another positive signal is that stock market once again comes to the level of 12000 mark. Companies started hiring but of course on lower salary packages then they do it before which means unemployment rate started decreasing.

As per my understanding there are still few sectors which lags behind in overall growth prospective e.g., agriculture sector which shows negative growth, SME sectors who has major contribution in GDP, education sector, exports sector etc. Government should develop some strategies to help and support these sectors for further growth. Government can allow PPP (Public Private Partnership) in education sector to develop it and to provide quality education. It can support agriculture and SME sectors by providing subsidies and cheaper loans and insurances to the farmers. Also, it can reduce its export duties to enhance the exporting activity of our country because right now the exporting condition is very bad. Our country is full of resources and has great minds among the world but still we are more dependent on imports from other countries which reduce our forex reserves.
One important aspect is that Government should impose tax on profits earned by trading in stock markets similar to other developed countries, to generate revenues and then using it to help other sectors.

So, we can see that India is on growing path and by analysts it was assumed that by 2030 India will be super power in the world. And to further increase the growth opportunities Government should apply above mentioned recommendations.
But yes, as I mentioned above it’s a cycle so Indian government should start making a protective shield around its economy as it definitely come again but with a huge force.