Many surveys in India tells that Mr.Narendra Modi has more chances to become as PM for India by winning the Parlimentry elections. Surveys are just to give an idea for people and politicians where media can raise their voice on politics, but unable to say that surveys will happen like the same. Mr.Modi has given that he will make 100 new cities, and will connect four major metro cities by bullet train and he will open IIT and IIM in each state which all his election propaganda, whether he will make or not but some how people expects that he will raise Indian Economy. He have many top challenges which need to change in right path for growth of economy.
Lets list out the top 5 which need to change and given in detail about each.
1. India’s GDP Growth
2. Current Account deficit
3. Depreciation of INR
4. Rate of Interest
5. FII’s Investment in India
India’s GDP Growth
A whole countrys total Internal production growth is taken as GDP growth. Agriculture, Business and Service Industry are the three major production and there are many problems in this three industries. Let me explain breif about the same. The major drawback in Agriculture is water scarcity, and Mr.Modi should allocate different new projects to save and generate water as done in Gujarat which Narmadha dam built. In Business Industry at 206-07 the GDP growth was 12.17% but at 2012-13 decreased to 0.96% and at 2013-2014 it will be decrease upto 0.65% which expected.
CCI(Cabinet Committee on Investments) approved only 5lakh crores project which there are more than 83lak crores projects submitted for past more than 15years. Only 25% is belongs to Central Government and all others are concern to State Government so its being delayed for several reasons which not disclosed. It cannot be rectified within 1-2years but if rectified it can be the golden period for Mr.Modi to get growth in India.
Third the Service Industry from 2005-2011 it has grown upto 10% but in 2012-2013 it has been decreased upto 6.96%. IT industry is goin well so Central Govt refused to give more help for their industry and also completely depends on Foreign Countries financial growth. So these three problems should be cleared by Mr.Modi to take in GDP growth for India.
Current Account deficit
The gap between Imports and Exports is called as Current Account deficit. In India Imports are more than Exports, so the gap is more so we are need to sell USD, EURO whichever available with Govt so the price of INR is depreciated and we are in force to pay more money to Import from other countries. In 2000-2004 Exports are more and Imports are less and more FIIs money invested so CAD as 2.3%+ but after 2006 its started decrease upto 4.6%. India need to increase Exports so then the CAD can be in moderate level. In our Imports major are Gold and Crude oil which both are not available in India,even though Govt leived taxes for Gold only some certain quantity can be avoided. Crude Oil is must to import if not no vehicles will move inside India. This is the second big challenge to Mr.Modi, lets wait and see what he do for India.
Depreciation of INR
Increase in price of all goods in India is called as INR is weak. Before few years Consumer Price Index(CPI) is double digits and also in Febraury 2013 it gone upto 8.79% and in Febraury 2014 it went upto 8.10% which is nearly 5% gap which Mr.Modi should be concentrate on this. To reduce the Inflation, production should be increased in India and also Crude Oil price should be taken into control, more or less it is not in Govts hands, because 100% crude oil is imported from other countries so they are the owners to fix the price according to supply and demand. As Congress failed to control this , so they became less popular within people this time. This is the third big challenge for Mr.Modi
Rate of Interest
If the Government fails to control the ROI then RBI takes it in their hands. By increasing the ROI people purchasing power gets reduced by borrowing from banks and others. So due to this Govt control the price hike of all goods. As the percentage of fixed deposit is more, peoples money hold at bank without any use, so Industrialist and others unable to use by paying more Interest than FD. So due to this if borrwoed, Industrialist profit is going to pay interest and the principal amount, so finally business and production becomes poor and not as expected. Where the fourth big challenge for Mr.Modi to face.
FII’s Investment in India
As there is shortage of money and production within the country, then they are expected to inflow the money from other countries and in 1991 the gates are opened for Foreign countries but also compared with China for last ten years only two times of investments are attracted by India. Mr.Modi has done a marvellous job in past five years for Gujarat many Foreign countries funds has been more and many policy changes need to be done all over the country in all states. But it is not very easy to change, these five challenges are the big to Mr.Modi need to rectify to get all support from India from top class to be low class people.