Thursday, July 9, 2009

PRIORITIES OF INDIAN ECONOMY AMIDST GLOBAL CRISIS

Crisis is a window of opportunities.India proved that with sheer brilliance after the Gulf Crisis in 1990 and started economic reforms which for the next decade or so put Indian economy into a commanding position.The present global financial crisis is of no difference.It has provided us two alternatives-to shine or to perish.It is how well we handle the crisi, will set the fortune of our economy for the coming years or so and will provide the world an answer to the doubt whether or not India truly has the potentials to become a global superpower in future.

The present task ahead of India is to undertake economic reforms considering twin objectives of our economy from the present shock and avoiding further financial turmoil.The means to do so may be summed up as below
  • Moving to an Inflation targeted monetary policy so that external influences on inflation can be minimized
  • Ensuring timely and adequate availability of credit for the priority sectors so as to ensure square growth of the economy.
  • Moving to a full capital account convertibility to bring back the sense of competition in the financial sector
  • Establishing a strong regulatory architecture so as to protect the irregularities in the financial market.
  • Restructuring the banking industry to make it competitive in the global scenario
We must understand inaction is no solution to the problem.We must not be jubilant as the impacts of the recession to our economy have not been as hard as to the developed nations' economies.Rather we must seek opportunities in danger and work harder for financial sector reforms and come up with flying colors while the developing nations continue do some firefighting to save themselves from th wrath of global recession.

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