Goldman Sachs lists challenges for Indian Economy
The international financial conglomerate Goldman Sachs has listed weak investment and muted monetary transmission as two of the greatest challenges for the Indian Economy.
What has happened?
- The Indian GDP growth had increased for an average of 6.7% in the time period of 2010-2014 to 7.3% in 2015-2019.
- Average inflation in India had fallen from an average of 10% to 5% in the same time period.
- While this has portended the to a good economic scenario in India, the investment in India has remained weak and this has created a major concern for the external investors.
- As per the Goldman Sachs, out of India’s average GDP growth of 7% but over 3/4th of the growth can be attributed to the consumption in India and only 1/4th can be attributed to the investment in India.
- Another main concern before the Indian economists is the weak GST collections which have complicated the economic cycle.
- As per the report, Goldman has also reported that several Goldman Sachs clients have expressed concerns about the government’s appetite for radical economic reforms in the laws related to land, labor, export promotion and privatization of business.
Why is this important?
The Indian Government is aiming to develop India into a USD 10 trillion by the year 2032. For this, the government is looking to make some institutional changes in the arrangement of funds to complete stalled infrastructure projects.
It also aims to provide some tax incentives to new home buyers which will increase the demand for the real estate sector.
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