IMF initially predicted the GDP growth would be at 5%. It is the main reason to worry because it is the lowest growth in the past ten years. However, on May 1, 2013, it changed it’s forecasted to 5.8 % for this current fiscal year. As the global economy is going through a stagnant growth phase, it is also affecting the Indian economy.
Indian IT, Manufacturing and Service sectors benefited a lot from globalization. Agricultural sector is the largest job producing sector for the people in the country. When other sectors achieved double-digit growth, but the agriculture sector is just growing at an average of 3.4 % from 2004."Slow agricultural growth is a concern for policymakers as some two-thirds of India’s people depend on rural employment for a living… Farmers' access to markets is hampered by poor roads, rudimentary market infrastructure, and excessive regulation." The above were said by World Bank in a report about India. When there is a need for huge investment into the agriculture sector, but the Prime Minister Manmohan Singh asking people to move out of agriculture to other the non-agricultural sectors (1). This is just an example how our governments neglected and neglecting the dominant sector of the country.
GDP (Gross Domestic Product) is a measure of country’s production or income. In a simple manner, it is the sum of incomes all people living in a country. When GDP growth declines mean total production of all sectors in the country is also decreasing. When production declines, it will result in job loss across sectors.
By 2020, the average age of an Indian will be 29. The number of young people entering the workforce is growing every year. In the recent 2013-14 union government budget, it was mentioned that the government planned to provide training for 90 lakhs people this year to improve their skill. Coming years will tell how many people got trained, and how many were benefited from the program.
From the history, it is a well-known fact that investors reluctant to invest when a growth rate reduces. The current government policies benefited a few big capitalists rather than small industrialists. Already many Indian and foreign companies wanted to modify our labour's laws to suit them. It is said that around 200 laws were in place to protect the interest of the workers in india. Even after having laws, workers are not getting their due wages in many parts of the country. Government may utilize this opportunity of slow growth rate, to allow many foreign players, provides more benefits to them and there is a possibility that there may be a change in labour laws to suit them.
The worst thing the government can do to the country is keeping the young people unemployed. It seems governments do not want to encourage the major employable sector in the country, i.e. agriculture.Congress led UPA government want to project growth as its success in the past ten years to gain votes. However, the truth is neither growth nor success stories happening in India. Growth declines , unemployment among youth , drought situation creating fear among us that Indian economy may go to 1991 situation.
