The horizon of Indian Economy is presently very bleak and dark, and so has it been for the last fifty years. The slow and sluggish Indian Economy can be attributed to a number of factors that have prevailed in India ever since we got our independence. The factors are many, and they are, recession on the home front, recession in all commercial and industrial playgrounds, and above all these the political instability. All these factors have together led to the complete sluggish growth of the Indian Economy. In this disappointing scenario, the only redeeming feature seems to be the economic scenario on the International horizon, which is also fraught with recession, and it is this that gives India a slight breather.
The fate of Indian economy is largely dependent on the trends of the world economy and it is this world economy that is now in the clutches of the worst ever crisis. The Stock Markets are crashing, industrial production has slackened, political upheavals are a common feature and the decline in exports in terms of important commodities is prevalent on a world wide scale. With all this in the world, it cannot be expected to find India escape unscathed or unblemished.
However, even with all this disappointment all around, we may recover from these painful shocks. Mr. yashwant Sinha, the Finance Minister 1998 – ’99, seems to be very optimistic and believes that, Indian economy would surely revive soon. It would be rather relevant at this juncture to add that, the present financial position of India, is the pent up results of decades of mismanagement of finances, and not a crisis created overnight. Mr. Yashwant Sinha has presented a very compact reform package. A few of the salient highlights of this package are as follows :-
a) The Kar Vivad Samadhan Scheme which is likely to fetch Rs. 30,000 Crores.
b) The FDIs to be doubled.
c) An intervention of the Foreign Exchange Markets.
d) Spending on the infrastructure.
e) Clearing of fast track Projects.
f) Simplified Tax rules.
g) Privatisation of Insurance.
This is just a part of the tax reform package offered for our presently ailing economy. A few facts and figures would now help us comprehend the real scenario.
During the first quarter of the year 1998 – ’99 industrial production has grown by 5.4% compared to 3.7% of 1997 – ’98. The Agricultural production has been rather good. Direct tax collections have grown at 41.1% during April – June 1998. Corporate receipts have also risen by 120%. Besides all this, in order to salvage the economy out of its present unstable condition, the Government has planned to give a major thrust to the Private Sector Projects. The finance sector has also to be restructured, and reforms are to be initiated in the Insurance Sector. Tax and Company Laws are also in grave need for major reforms. Together with all these there has to be a marked increase in the inflow of investments. Foreign Investment norms are also to be set up.
All these plans of revitalizing the Indian Economy would come to nought if the Government at the centre remains unstable or gets changed. It is true that Indian Economy is going through a turbulent time, however, economic observers feel that, the Indian Economy would surely be retrieved, and that, its position and growth will be much better than most of the other economic players of the world. At this juncture since global economy is facing a decline, the interest of the world has been generated in Indian economic growth. The recovery cannot be predicted but, it is a happy trend to see that the Government is working hard towards the cherished goal of an economically strong and healthy India.