In this blog we are going to get info on some of the recent strategies Indian Economists have used to cope up with International Economic challenges.
I think Economy is a vast subject and by reading this blog you will get more idea about economy related recent strategies and present economic situations. This blog might help you to clear your views and it might increase your overall knowledge.
A very simple and basic blog on Economy. Read it full.
Before starting this UPSC related stressed analysis I would suggest that if you have time and you are passionate for learning coding , it is free on the Internet. There are MOOC courses and W3schools on the Internet which are free sources of Coding knowledge and Programming. So if you want you can try to go for that also.
India’s Current Economic Strategies to Sustain Growth
India is implementing several key strategies to strengthen its economy, focusing on trade, investment, monetary policies, and industrial growth. These initiatives aim to boost capital inflows, improve trade relations, and support domestic industries.
1. Strengthening Trade Relations and Reducing Tariffs
To expand global trade, India is enhancing its economic ties with the United States by increasing energy imports and reducing tariffs. The government plans to raise U.S. energy imports from $15 billion to $25 billion, with a potential removal of import duties on liquefied natural gas (LNG) to make it more affordable. Additionally, India has lowered tariffs on luxury cars, machinery, and bourbon whiskey to promote foreign investments. Furthermore, the 6% digital advertisement tax has been removed to attract major U.S. tech firms.
2. Encouraging Foreign Investment
India is set to double the investment limit for foreign individuals in listed companies, increasing it from 5% to 10%. This move aims to enhance capital inflows and strengthen the financial sector by making Indian markets more accessible to international investors.
3. Monetary Policy Adjustments
To manage liquidity in the banking system, the Reserve Bank of India (RBI) is considering reintroducing fixed daily funding for banks. This policy adjustment is aimed at stabilizing liquidity fluctuations caused by forex interventions and government spending patterns.
4. Promoting Agricultural Exports
India has lifted restrictions on rice exports, with an ambitious goal of doubling agricultural shipments by 2030. This decision is expected to boost economic growth and enhance India’s market presence in Africa and East Asia, where its rice remains in high demand.
5. Fiscal Policies and Tax Reforms
The 2025-26 Union Budget introduces significant tax and financial reforms, including:
- Income Tax Relief: No income tax for individuals earning up to ₹12 lakh under the new tax regime.
- Agriculture Support: Launch of the Prime Minister Dhan-Dhaanya Krishi Yojana, alongside increased credit facilities for farmers.
- Research & Development (R&D): Allocation of ₹20,000 crore to support private-sector-driven research and innovation projects.
6. Industrial Policies and Infrastructure Growth
India is focusing on manufacturing growth through Production-Linked Incentive (PLI) schemes, tariffs, and domestic content requirements. These policies aim to promote self-reliance and industrial expansion, reducing dependency on imports while strengthening domestic production capabilities.
These strategic economic measures reflect India’s commitment to enhancing trade, fostering investments, stabilizing banking policies, and supporting industrial and agricultural growth.
References:
Challenges Faced by the Indian Economy
| Challenge | Description |
|---|---|
| 1. High Inflation | Rising food and fuel prices increase the cost of living, making it difficult for the RBI to balance inflation control and economic growth. |
| 2. Unemployment and Job Creation | Job creation is not keeping pace with the growing workforce; many graduates lack skills required by industries. |
| 3. Inequality and Poverty | Economic disparity remains high; rural areas still lack quality education, healthcare, and employment opportunities. |
| 4. Banking and Financial Sector Issues | High Non-Performing Assets (NPAs) affect credit availability; financial fraud and cyber risks are increasing. |
| 5. Fiscal Deficit and Government Debt | Rising government spending on subsidies and welfare programs leads to high fiscal deficit and growing national debt. |
| 6. Infrastructure Deficiencies | Poor transport, logistics, and power infrastructure slow down industrial and economic growth. |
| 7. Slow Industrial Growth and Manufacturing Challenges | Heavy reliance on imports for technology and materials; slow progress in Make in India and PLI schemes. |
| 8. Agricultural Sector Woes | Dependence on monsoons, low farmer income, and lack of modern technology create challenges in the agricultural sector. |
| 9. Energy Crisis and Sustainability Concerns | High dependence on coal and imported crude oil; slow adoption of renewable energy sources. |
| 10. Geopolitical and Global Risks | Trade and security tensions with China and Pakistan, global financial crises, and supply chain disruptions impact economic stability. |
All in all
To ensure sustained economic growth, India must address these challenges through policy reforms, infrastructure development, industrial growth, and financial stability measures.
UPSC Questions Based on Indian Economic Challenges & Solutions
Here are some Prelims (MCQs) and Mains (Descriptive) questions related to the economic challenges India faces.
Prelims (MCQs) Questions
1. Which of the following factors contribute to inflation in India?
(a) Rise in crude oil prices
(b) Supply chain disruptions
(c) Increase in money supply
(d) All of the above
✅ Answer: (d) All of the above
2. What is the primary objective of the Production-Linked Incentive (PLI) scheme in India?
(a) Boosting the IT sector
(b) Promoting manufacturing and exports
(c) Encouraging foreign companies to set up offices in India
(d) Reducing fiscal deficit
✅ Answer: (b) Promoting manufacturing and exports
3. Which of the following initiatives aims to provide financial security to small farmers in India?
(a) MNREGA
(b) PM-Kisan
(c) Start-Up India
(d) Smart Cities Mission
✅ Answer: (b) PM-Kisan
4. The term ‘Non-Performing Assets (NPAs)’ is used in reference to which sector?
(a) Agricultural sector
(b) Industrial sector
(c) Banking sector
(d) Real estate sector
✅ Answer: (c) Banking sector
5. India’s high dependence on imported crude oil primarily leads to which of the following economic challenges?
(a) Higher trade deficit
(b) Currency depreciation
(c) Inflationary pressures
(d) All of the above
✅ Answer: (d) All of the above
Mains (Descriptive) Questions (Read Full-Answers Beneath)
1. Inflation is a major economic challenge for India. Discuss the causes of inflation and suggest measures to control it.
2. India has been facing an employment crisis despite rapid economic growth. Analyze the reasons behind jobless growth and suggest policy measures to address this issue.
3. The banking sector in India is struggling with rising NPAs. Explain the causes of NPAs and suggest strategies for improving financial stability.
4. Discuss the role of fiscal deficit in India’s economy. How can the government manage the deficit while ensuring economic growth?
5. Infrastructure development is crucial for India’s long-term economic growth. Examine the key challenges in India’s infrastructure sector and suggest measures to overcome them.
6. The agriculture sector is the backbone of the Indian economy, yet it faces several challenges. Discuss the major problems in Indian agriculture and evaluate government initiatives to address them.
7. Energy security is crucial for India’s economic stability. How can India reduce its dependence on imported fossil fuels and transition to renewable energy?
8. In the wake of global geopolitical risks, how can India strengthen its economy to be more self-reliant? Discuss in the context of ‘Atmanirbhar Bharat’.
9. How do trade and economic relations with China and the United States impact India’s economic policies? Analyze with relevant examples.
10. The ‘Make in India’ and ‘Production-Linked Incentive (PLI)’ schemes aim to boost manufacturing in India. Critically evaluate their success and the challenges they face.
Answers to these UPSC Indian Economy related Questions.
I hope you liked info provided here
Best of Luck
Extra Refernce :
More to Read :
Stocks : Best USA Stocks – Full Stocks Analysis
Politics : Donald Trump News – Interesting Donald Trump News