Indian economic and its challenges

As we know on the eve of independence Indian economy was totally stagnant and backward. The targeted exploitation across all sectors by the British government was so deep rooted that after independence Indian economy required a big push of investment supported by direct participation of the government in the process of growth and development. That is why five years plan was launched in 1951 to reconstruct the Indian economy. Due to different reforms in all sectors during different five vears plan between 1950 to 1990, Indian economy achieved much and more of its goals/objectives, But all were just a significant, not sufficient. Battling the economic crises of 90's, Government of India made a series of economic reforms in 1991 named New Economic Policy (NEP). Since 1991, the Indian economy has pursued free market liberalisation, greater openness in trade and increase investment in infrastructure. This helped the Indian economy to achieve a rapid rate of economic growth and development. According to some experts, the share of the US in world GDP is expected to fall (from 21 percent to 18 percent) and that of India to rise (from 6 percent to 11 percent in 2025), and hence the latter will emerge as the third pole in the global economy after the US and China.

By 2025 the Indian economy will be projected about 60 percent the size of the US economy. The transformation into a tri-polar economy will be completed by 2035, with the Indian economy only a little smaller than the US economy bur larger than that of Western Europe. By 2035, India is likely to be a larger growth driver than the six largest countries in the European Union (EU), though its impact will be a little over half that of the US. India, which is now the fourth Jargest economy in terms of purchasing power parity, will overtake Japan and become third major economic power within 10 years. As India prepares herself for becoming an economic superpower, it must expedite socio-economic reforms and take steps for overcoming institutional and infrastructure bottlenecks inherent in the system. Availability of both economic and social infrastructure is central to sustainable economic growth.

 Since independence Indian economy has thrived hard for improving its pace of development. Notably in the past few vears the cities in India have undergone tremendous infrastructure up gradation but the situation in not similar in most part of rural India. Similarly, in the realm of health and education and other human development indicators India's performance has been far from satisfactory, showing a wide range of regional inequalities with urban areas getting most of the benefits. In order to attain the status that currently only a few countries in the world enjoy and provide a more egalitarian society to its mounting population, appropriate measures need to be taken. Still fallowing are the challenges facing by Indian economy.

1. Sustaining the growth momentum and achieving an annual average growth of 7-8% in the next five years.

2. Simplifying procedures and relaxing entry barriers for business activities.

 3. Checking the growth of population; India is the second highest populated country in the world after China. However, in terms of density India exceeds China as India's land area is almost half of China's total land. Due t a high population growth, per capita remains very poor. It was only $ 2880 in 2003 (World Bank figures).

 4. Boosting agricultural growth through diversification and development of agro processing.

 5. Expanding industry fast, by at least 10% per year to integrate not only the surplus labour in agriculture but also the unprecedented number of women and teenagers joining the labour force every year.

 6. Developing world-class infrastructure for sustaining growth in all the sectors of the economy.

7. Allowing foreign investment in more areas.

 8. Effecting fiscal consolidation and eliminating the revenue deficit through revenue enhancement and expenditure management

 9. "Empowering the population through universal education and health care, India needs to improve its Human Development Index (HDI) rank, as at 134 it is way below many other developing countries' performance. The Central government is committed to furthering economic reforms and developing basic infrastructure to improve lives of the rural poor and boost economic performance. Government had reduced its controls on foreign trade and investment in some areas and has indicated more liberalization in civil aviation, and telecom.