weaknesses of the Indian economy
Answers
Answer:
- Weakness of Indian economy
Inflation was one of the major weakness of our economy. But inflation is brought under control and is lowest now at 3.63%. If the crude rate increase the inflation may also leading to economic upheaval.
Low earning level also hinder economic growth because the nursing no were of the people is affected.
The high interest cost affect investments. High input costs lead to low corporate profits at high operating costs. If the same is passed on to the consumers it will result in high inflation. Pure commodity players may benefit. But others processing unit or those turning them into finished product will be impacted by the high cost of raw materials and operating margins.
Poor rural population is the major worry. 66% of the population reside in rural areas contributing 16% of GDP. Reliance on rain water, the poor infrastructure, illiteracy, unskilled labour affect productivity. Their income which is $350/year is too low.
Non-financial corporate balance sheet are stressed leading vto poor private investments.
Indian economy is prone to fluctuations in petroleum crude prices. Our economy is mover dependent on import of crude. Any variations in prices will affect the economy.