Please enable JavaScript.
Coggle requires JavaScript to display documents.
Macroeconomic Objectives- India - Coggle Diagram
Macroeconomic Objectives- India
The three objectives
Economic growth
can be defined as the increase or improvement in the inflation-adjusted market value of the goods and services produced by an economy in a financial year.
Full employmen
t embodies the highest amount of skilled and unskilled labor that can be employed within an economy at any given time. True full employment is an ideal—and probably unachievable—situation in which anyone who is willing and able to work can find a job, and unemployment is zero.
The objective of
price stability
refers to the general level of prices in the economy and implies avoiding both prolonged inflation and deflation.
ECONOMIC GROWTH:
Pradhan Mantri Jan Dhan Yojana (PMJDY):
This financial inclusion scheme aims to provide basic bank accounts to all citizens, facilitating easier access to credit and promoting investment.
Progression: Over 450 million bank accounts opened under PMJDY as of 2023, promoting financial inclusion. However, concerns remain about account dormancy (around 28% in 2020) and access to credit in rural areas (credit penetration in rural areas remains below 50%).
Impact: Increased financial inclusion by over 190 million accounts since 2014, but limited impact on overall investment due to dormancy and credit access issues.
Bharatmala Pariyojana: This ambitious infrastructure development program aims to improve connectivity through a network of highways, ensuring efficient movement of goods and services, ultimately boosting economic activity.
Start-up India Initiative: This program offers tax breaks, funding opportunities, and mentorship programs to new businesses, fostering innovation and entrepreneurship, which are key drivers of economic growth.
Special Economic Zones (SEZs): These designated areas offer relaxed regulations and tax benefits to attract foreign and domestic investment, promoting export-oriented industries and economic growth.
PRICE STABILITY
.
Monetary Policy Framework:
The RBI uses a flexible inflation targeting framework to guide its monetary policy decisions. This framework aims to keep inflation within a pre-defined range (currently 4+/-2%) through adjustments in the repo rate.
Progression: RBI has successfully maintained inflation within the target range of 4+/-2% for most of the past five years. Average annual inflation between 2018-2023 was around 4.5%.
Impact: Relative price stability achieved, fostering an environment conducive to business planning and investment. This has also contributed to a stable exchange rate.
Operation Greens:
This government initiative aims to connect farmers directly to consumers, reducing wastage and price manipulation by middlemen, leading to more stable and affordable food prices.
Fiscal Responsibility and Budget Management (FRBM) Act:
This act aims to control government spending and reduce the fiscal deficit, thereby preventing excessive money supply and inflationary pressures.
FULL EMPLOYMENT
.
Skill India Mission:
This initiative aims to train and equip the workforce with industry-relevant skills, improving employability and reducing skill gaps.
Progression: Over 1 crore (10 million) people trained under Skill India by 2023. However, quality and industry relevance of training programs vary considerably.
Impact: Positive steps towards skilling the workforce, but effectiveness in bridging the skill gap with actual job market needs requires further evaluation. A 2020 survey by Assocham (an Indian industry association) indicated that around 60% of employers felt skill gaps persisted in critical sectors.
Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA):
This program guarantees 100 days of wage employment in unskilled manual labor to rural households, providing a safety net and income generation during lean periods.
Atal Mission for Rejuvenation and Urban Transformation (AMRUT):
This program focuses on urban development projects, creating employment opportunities in construction and related sectors.