ECONOMIC HEALTH OF INDIA

In the current juncture, infrastructure and especially construction has the largest potential to acquire productivity gains and to generate employment appropriate to the skills available.So, at this point of time, relaxing the fiscal deficit to allow such investment and give private firms the required push would be a sensible step taken while considering their balance sheet problems, even as Jan Dhan Yojna effectively wipes the tears of lives of fortune lackers.

The eight percent growth target depicted by the CSO seems satisfactory, but it should be noted that the CSO draws on a vastly improved data base of the firms for the revised GDP figures.As actual measurements replaced earlier approximations, the new figures are likely to be more reliable.but other data such as credit and IIP (Index of Industrial Population) growth suggest considerable slack in the economy so, it seems like the potential growth was earlier underestimated.

We  know that neither firms balance sheet problems nor banks financial repression is as intractable as suggested by the Economic Survey.So,one can say that, there is a good possibility of, conditions of growth to be better than what the Economic Survey suggests.Moreover, the JAM (Jan Dhan Yojna , Adhar & Mobile  no.) trinity has the potential not only to alleviate distress but also to improve productivity.But, as the implementation aspects do not get sufficient emphasis either in the budget or in the Economic Survey, conditions for growth could be worse.

According to Economic Survey, more public investment is necessary to facilitate the good going of private investment.It would be disheartening if it comes out to be true, since the budget raises capital expenditure only by 0.3 percent of GDP, while having met its earlier fiscal deficit target of 4.1 by reneging on its past promise of a double digit increase in capital expenditure.There appear some serious limitations on government investment capacity.this growth has been stagnant at around 1% of GDP for the past few years.But, excess public consumption  expenditure has been positively harmful , so changing the composition of the government expenditure is the need of the hour, and even small steps in that direction are to be welcomed.But the government contribution at present put forward at improving the ease of doing business.

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