Analyzing the Factors Driving Economic Growth for UPSC Exam
India’s economy is among the fastest-growing economies in the world, with a GDP of USD 2.9 trillion in 2019. The country’s economy is characterized by a promising demographic outlook and an increasing middle class, making it an attractive destination for investors. With the upcoming UPSC exams, it’s important to have a thorough understanding of the factors driving economic growth in India. In this article, we’ll analyze the factors fueling India’s economic growth and the associated challenges.
Demographic Dividend
India is experiencing a demographic dividend which means that the country has a young population with a median age of 28 years. This demographic strength offers a poor country a prime opportunity to grow its economy. It refers to the phenomenon where a country’s working-age population surpasses its non-working population, leading to higher savings, investments, and consumption. In India, the working-age population constitutes almost 65% of the total population, which is a considerable advantage for the country. However, to tap into the potential, the country must equip its young population with the right set of skills that are in high demand in the global market.
Infrastructure
India’s infrastructure sector has traditionally been a bottleneck for economic growth. However, the government has taken several initiatives in this regard, such as the construction of Smart Cities, Bharatmala Pariyojana, Dedicated Freight Corridors, and the Sagarmala project, among others. The government has also liberalized infrastructure development by allowing 100% FDI in several sectors and public-private partnerships. The development of modern infrastructure is vital to the country’s economic growth as it facilitates trade, transportation, and logistics.
Ease of Doing Business
The ease of doing business has been a major focus of the Indian government in recent years. Improvements have been made in several areas, including company incorporation, tax administration, bankruptcy resolution, labor laws, and construction permits. According to the World Bank’s ease of doing business ranking, India has jumped from the 142nd position in 2014 to 63rd in 2019. A friendly business environment is essential to attract domestic and foreign investments, and it has a direct impact on the country’s economic growth.
Technological Advancements
India has emerged as a hub for technological innovations in recent years. The government’s initiative to set up mega-manufacturing zones, software technology parks, and digital literacy programs has put India on the world map as a tech hub. This has led to a surge in employment opportunities, a significant contribution to the economy, and the establishment of a robust tech-based ecosystem. Technological advancements have propelled growth in various sectors such as healthcare, education, agriculture, and finance, among others, for the benefit of the masses.
Conclusion
India is poised to become a global economic powerhouse in the coming years. The country has a young population, improving infrastructure, an increasingly friendly business environment, and a burgeoning tech industry that is driving economic growth. The challenge lies in continuing to develop the right policies to sustain momentum and address the obstacles that come with developing a modern economy. With the UPSC exam around the corner, it’s crucial to have a thorough understanding of the factors driving India’s economic growth.
